<p>Under pressure to shake up Earthlink Inc., new chief executive Rolla P. Huff announced Tuesday the struggling Atlanta-based Internet service provider would cut roughly half its work force and close four offices.</p><p>As part of the plan, EarthLink is cutting 900 staff and plans to repurchase $200 million of its stock, the company said. More moves could be announced by the year's end but no more cuts are expected, Huff said.</p><p>"These changes get our cost structure in line, but there is much more to do," he said.</p><p>EarthLink shares climbed 7 percent on the news, and some analysts welcomed the development by upgrading the stock.</p><p>Huff, who was named chief executive in June, leads a company that has struggled to generate revenue as dial-up access customers turn to high-speed alternatives from cable and phone companies.</p><p>Like many other Internet service providers with roots in dial-up access, EarthLink has sought to diversify its revenue base. The company resells some high-speed services, but phone companies have been able to offer cut-rate prices, particularly as part of bundles with traditional long-distance and local calling plans.</p><p>The company had counted on the right to sell customers access to citywide wireless networks in exchange for helping cities build the networks. But amid questions about customer demand and the technology's performance, EarthLink announced in April that it was reviewing new deployments while evaluating the performance of the current rollouts in four cities.</p><p>Chicago officials said Tuesday that they will shelve a plan to blanket the city's 228 square miles with wireless broadband Internet because it is too costly and too few residents would use it. The city said its negotiations with private-sector partners, including EarthLink, have stalled because any citywide Wi-Fi system would require massive public financing.</p><p>EarthLink must also face questions over disappointing results from its Helio project, a wireless joint venture with SK Telecom of South Korea. The company has already committed to invest $220 million in Helio and has said it could spend another $50 million on the project, which was blamed for quarterly losses.</p><p>In July, the company cut its fiscal year 2007 revenue estimate after reporting hefty losses related to the Helio project.</p><p>As part of the cuts, the company said it will close offices in Orlando, Fla., Knoxville, Tenn., Harrisburg, Pa., and San Francisco and "substantially reduce its presence" in Atlanta and Pasadena, Calif. It will also cut 900 of its roughly 1,900 employees, he said.</p><p>The cuts are projected to cost the company between $60 million and $70 million through the rest of the year. It also said it expects to generate $25 million to $35 million in cost savings through the rest of 2007.</p><p>As part of the announcement, the company lowered its 2007 revenue outlook for the third time this year. EarthLink said it now expects sales of $1.19 billion to $1.21 billion _ down from its previous forecast of $1.23 billion to $1.24 billion. The company said it expects a full-year loss of $79 million to $109 million, excluding restructuring charges.</p><p>EarthLink also offered a warning for 2008, saying it expects subscriber additions to slow.</p><p>Huff, who was appointed in late June, is known by analysts for his willingness to cut loose unprofitable projects. He told reporters then that he would conduct a two-month review of the company's businesses aimed at "getting a very focused strategy."</p><p>Analysts reacted positively to Tuesday's announcement. Denver-based Janco Partners upgraded its grading of the stock after the news, saying it was a signal EarthLink will take a more "pragmatic" approach toward its municipal wireless business. And Soleil-Channel Mark Capital analyst Christopher Rowen upgraded the stock to a "buy" in a note to investors.</p><p>EarthLink is hardly alone in its struggles.</p><p>Last August, Time Warner Inc.'s AOL decided to stop actively marketing Internet access and start giving away AOL.com e-mail accounts, software and other features once limited to paying customers. AOL is trying to attract more advertising dollars on its free sites by doing so.</p><p>Meanwhile, United Online Inc., the company behind NetZero and Juno, has diversified by buying properties like United Airlines' MyPoints loyalty program and Classmates.com. Parent company Classmates Media Corp. recently filed for an initial public offering, though United Online would remain the controlling stockholder.</p><p>___</p><p>On the Net:</p><p>HASH(0x2def654)</p>
