Fixed wireless home internet provider Starry is cutting about half of its workforce, and canceling plans to expand into new states. Starry’s board of directors okayed the plan to cut 500 jobs, the internet service provider said. “The decision was based on cost-reduction initiatives intended to reduce operating expenses and allow the company to focus on serving its existing core markets and customers,” the company said in an SEC filing.
Starry said the job cuts will be “substantially complete” by the end of December. Starry froze hiring and non-essential expenditures and withdrew full-year 2022 guidance that was previously given to investors, reported Ars Technica.
“This is an extremely difficult economic climate and capital environment, and at present we don’t have the capital to fund our rapid growth. Because of that, we’re focusing our energies on our core business: serving multi-tenant buildings in our existing dense urban markets,” Starry CEO Chet Kanojia said.
Kanojia said Starry “needed to curtail our cash burn while we pursue strategic options,” but stressed that it wouldn’t abandon its customers. “I want to be clear: Starry remains open for business,” he said. “We, like so many others, are making the difficult calls now and taking steps that will allow us to be laser-focused on financing the business over the long-term and continue serving our markets.”
The cost-cutting moves come after Starry told the FCC it would default on its Rural Digital Opportunity Fund bids, Inside Towers reported. The agency had provisionally awarded $268.85 million to serve 108,506 homes and businesses in nine states.
Withdrawing from the RDOF program was a “tough decision,” Kanojia said, according to Ars Technica. “While participation in this important program fit within our strategic vision in 2020, changing capital needs, changing capital environments, and continued success in the urban multitenant market forced a decision to take a step back and focus our energies and capital on executing on our core business plan.”
The Boston company has seen its stock price crater by 83 percent this year as it tries to build out its wireless service in a handful of cities, including Boston, New York, and Los Angeles. Starry had about 91,000 customers across seven markets at the end of September, a 66 percent increase from a year earlier, according to The Boston Globe.
Starry said it would incur one-time charges of $3 million in connection with the workforce reduction but save $48 million in operating expenses over the next 12 months. “The company also anticipates approximately $10.4 million in non-cash savings related to share-based compensation expenses that will no longer be recognized due to the cancellation of previously granted, unvested equity awards,” Starry said in its SEC filing.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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