A press release issued today by EarthLink (ELNK) outlines a comprehensive corporate restructuring plan that is taking way immediately. The plan includes cutting approximately 900 jobs and closing multiple offices nationwide, which is expected to give the company $25 to $35 million in cost savings this year alone. However, the costs associated with the restructuring will be anywhere from $116 to $140 million, allocated between the third and fourth quarters of 2007. The company expects cost savings to overtake restructure costs within six months. EarthLink has changed their outlook for 2007 as a result of the restructuring and is now expecting $1.19 to 1.21 billion in revenue for 2007. In addition, they expect industry-wide subscriber addition to slow, forecasting fewer EarthLink subscribers in 2008. The company’s board of directors has also authorized an additional $200 million for stock buyback, bringing the total allocation to $270 million. And lastly, for the company’s updates, Joe Wetzel has been appointed EarthLink’s new COO.
A lot of news for the company and wall street seems to like it. The stock was up as much as 12% on the news.