Netpliance slashes workforce by 54%; co-founders resign

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Internet appliance maker Netpliance announced plans to cut 54% of its employees in a cost-cutting measure announced Feb. 2, and two co-founders of the company resigned. In a release, the company said it will lay off 76 employees in a move designed to save $6 million, leaving about 50 remaining workers. Netpliance said cofounder Kent A. Savage resigned, effective March 15, to pursue other opportunities but will remain on the board of directors; co-founder Kenneth A. Kalinoski, as well as Valerie Walden, VP-general manager, also resigned. The company first laid off employees in November 2000, reducing its workforce by 93 positions, or 38%. At that time, the company announced it was quitting the Internet appliance business, citing increased competition from personal computer marketers such as Gateway and Compaq Computer Corp. Instead, the company said it was changing its strategy to focus on high-speed cable Internet access. Netpliance went public in 1999, announcing itself with a Super owl commercial handled by McGarrah/Jessee, Austin, Texas. Netpliance launched the i-opener last January, with financial support from companies including Walt Disney Co. But only 53,000 i- openers were sold; sales growth did not meet company expectations. Last week, Netpliance announced that an investment group led by CEO John McHale dropped efforts to take the company private; it also faces delisting from the Nasdaq because its stock price has hovered below $1 for several weeks. The price recently hit a low of 28 cents a share.

Copyright February 2001, Crain Communications Inc.

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