EarthLink, the primary contractor for Honolulu’s municipal WiFi project in Chinatown, is laying off more than 900 employees and closing 4 offices, according to news reports. This is a massive cut that affects almost half of the company and several business units.
In one of yesterday’s posts, I discussed some of the changes in the wireless Internet industry. EarthLink’s retrenchment in municipal WiFi was announced earlier this year, when the company said it wouldn’t pursue new contracts until it had a better idea of the financial returns on current projects. Sprint’s recent alliance with ClearWire, Google’s continued efforts in mobile applications and wireless access, and the stagnating economy are other factors that have affected EarthLink’s competitive position.
Helio hath no fury… or market share
It isn’t the WiFi market that’s hurting EarthLink, though. The company’s investment in Helio has not worked out well. I mentioned Helio on June 17 and April 17. The iPhone and the industry’s various responses to that service have put Helio in a lousy position for a startup company. According to The Register, Verizon is moving fast with its new offerings, with some help from Samsung.