Layoffs impact fiber business and corporate overhead.
Tucows (NASDAQ:TCX) announced today that it laid off 17% of its employees as part of a capital efficiency plan.
The move primarily impacts its Ting business, which provides fiber-to-the-home broadband services. 42% of Ting’s workforce was cut.
There were also layoffs at the corporate level. The release does not mention any cuts to Tucows’ domain name business.
Increased interest rates are challenging the Ting business. Tucows has typically borrowed money for the capital-intensive model of building fiber connections.
Tucows CEO Elliot Noss stated:
We undertook the capital efficiency plan after exploring all other options to finance Ting’s continued expansion. This plan will put the Ting and Tucows businesses back to paths of growing Adjusted EBITDA. With a more efficient cost structure and capital from our recent asset-backed securitization, we are focused on increasing penetration within our own footprints and within large partner markets like Memphis and Colorado Springs. Our goal is to transition Ting to a cash-generating business that sustains its own operations and growth.
The company will provide more details about its plan in its recorded earnings call next week.
Shares in Tucows hit $91 in this month of 2021 but have sunk since then. The company’s shares are trading at under $19 today.
Wow! The 4th or 5th public or internal mass layoff in the past couple of years?
What is the future outlook for Tucows, especially the domains division? Wondering how this is affecting the employee’s mental health and morale going into the holiday season.