NaviSite Lays Off 7 Percent of Workforce

Citing changing market conditions, NaviSite (www.navisite.com) announced plans to lower its operating costs by reducing its workforce by about 7 percent, or 44 positions. The company also states that it will continue its efforts to increase efficiency through automation and improved work processes.

The bulk of the layoffs are the result of NaviSite's decision to close two regional sales offices in Austin and Chicago, where productivity was below target levels. NaviSite states that the responsibility for the two sales territories will be picked up throughout the company's other sales offices. According to Chris Levy, chief technology manager of NaviSite's Streaming Media Division, the sales team cuts should not have an effect on the Streaming Division, as this division is represented by its own dedicated sales group.

"NaviSite will continue to strive to drive down costs through increased efficiencies, and will continue to raise the bar in terms of innovation," commented Joel Rosen, president and chief executive officer of NaviSite. "As we have done in the streaming area with streamOS and in the monitoring area with ESM 2.0, which went live this month, we see many opportunities to use our unique knowledge and experience to create solutions that improve quality and ROI for our customers."

Trish Gilligan, chief operating officer of NaviSite, added, "We continually monitor our business operations, and we will continue to look at our operating model to develop ways to lower unit operating costs and reduce the capital requirements of our business."

For the quarter ending October 31, 2000, NaviSite reported a net loss of $23,084,000 based on total revenue of $26,036,000, or a $0.39 basic and diluted net loss per common share.