WOW to Lay Off 9% of Workforce
WideOpenWest (WOW), the largest overbuilder in the country with about 800,000 customers, said it will lay off about 270 employees, or about 9% of its 3,000-member workforce, in an effort to improve its position for future growth.
“The reduction in force affects all WOW functions and locations,” WOW! said in a statement. “The company is making this change to compete more effectively and better position itself for future growth.” The layoffs are expected to continue through early next year, according to reports.
News of the layoffs – first reported in the Lawrence, Kans., Lawrence Journal-World – come just days after the overbuilder said it would raise prices in some areas by as much as $15-$20 per month on Jan. 1, including the implementation of a $2-per-month sports surcharge fee, a $1-per-month local origination programming fee and a $5-a-month broadcast TV fee, according to the Journal-World.
WOW is owned by private equity group Avista Capital Partners. The company, which announced a management succession plan in April, where chairman and CEO Colleen Abdoulah turned over the CEO reins to president Steve Cochran CEO while retaining the board chair title. Also at that time, chief marketing officer Cathy Kuo was promoted to chief operating officer.
WOW had been one of the more successful overbuilders – in 2012 it paid $1.6 billion for Georgia-based overbuilder Knology – but recently has hit some bumps in the road. Third quarter revenue was $323.2 million, an 8.7% increase over the prior year but cash flow fell 2.2% to $109.9 million. In June the company sold systems in Sioux City, S.D. and Rapid City, S.D with about 53,000 customers to Clarity Telecom or about $262 million.
According to SEC documents – privately held WOW has some public debt – WOW had about 816,000 total customers -- 654,000 video customers, 730,000 high-speed data customers and 374,000 phone customers as of Sept. 30.
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By David Bloom