December 13, 2019
Wireless networking company Boingo said it will cut 80 positions, or 16% of its workforce, in a move to reduce expenses and pare down its operations. The company also said it will stop investing in its retail and advertising business units as part of the move.
The company approved the restructuring effort this week, and announced it today in an SEC filing. Boingo said it will take a restructuring charge this year of $2.2 million mainly due to employee severance and benefit costs, and said the effort will reduce its operating costs by $11 million annually.
Boingo said it will focus on its three “growth” businesses:
Offering Internet services on military bases;
And installing telecommunications services in apartment buildings, a business it acquired last year via the purchase of Elauwit Networks.
As part of its restructuring, Boingo said it will focus on "managing the profitability of the company’s legacy businesses such as retail and advertising." Boingo's advertising business, which involves advertisers sponsoring WiFi access in airports and other locations where Boingo operates a network, accounted for 3% of the company's revenue in its most recent quarter. And Boingo's retail unit, which involves selling WiFi access to consumers, accounted for 6% of its total revenues. In its most recent quarter, Boingo counted 85,000 retail customers, an almost 40% decrease over the previous year.
The news appears to come at a difficult time for the provider. Based on anonymous posts to the Glassdoor employment website, morale at the company has been declining as Boingo hunts for new revenue opportunities. And a source familiar with the company's operations said key positions within Boingo's executive ranks remain empty, despite the fact that Boingo replaced longtime CEO David Hagan with Mike Finley, a former Qualcomm executive, earlier this year.
A Boingo representative disputed the notion that the company is struggling and said the company is in fact positioning itself for growth. The representative said that Boingo is adding a number of roles that are aligned with its “core products and services.”
Boingo's latest troubles could further worry investors, who have sent Boingo's shares to lows the company hasn't seen since 2016.
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