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FutureLink Cuts Work Force in Wake of Acquisitions

Labor: Lake Forest Internet support company trims about 75 jobs it says are redundant, closes some offices.

October 18, 2000|MARC BALLON | TIMES STAFF WRITER

FutureLink Corp., which helps businesses run their Internet sites from remote locations, said Tuesday it has slashed about 75 positions--more than 10% of its work force--mainly to eliminate duplicate jobs after a series of acquisitions.

The Lake Forest company has snapped up seven companies over the last year as it sought to expand its operations throughout the U.S. and elsewhere.

"With all our acquisitions there was bound to be some redundant positions," said Troy Cleland, FutureLink's head of investor relations.

As part of the consolidation, FutureLink is closing offices in Las Vegas, Raleigh, Atlanta and other cities. Cleland refused to identify the other sites.

FutureLink, which has lost about $87.5 million the last 18 months, expects to save about $12 million over the next year as a result of the cuts, which reduced the work force to 650 employees.

All of the companies acquired by FutureLink provide Citrix Systems software, which modifies applications so they can be used over the Internet, cell phones, Palm Pilots and in other hand-held digital devices.

William Dering, an analyst with C.E. Unterberg, Towbin in New York City, said job reductions are part of the "natural course of events" when a business makes several acquisitions.

Dering also said the move allows FutureLink to conserve some cash at a time when its mounting losses and depressed stock price could make it difficult to raise funds.

In the second quarter alone, FutureLink lost $28.6 million, more than double its losses a year earlier.

FutureLink shares hit a 52-week low of $2.13 Tuesday before closing at $2.19, off 16 cents a share, in Nasdaq trading. The stock has lost more than 91% of its value this year.

Cleland declined to comment on Dering's observations. He attributed the losses to "high upfront capital costs" for computers and other sophisticated equipment.

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