Aegis cuts half its staff, waits for funding
Aegis Broadband cut 14 jobs, or half its staff, as it awaits funding, its management says. The workers, primarily in operations and engineering, were laid off with the suggestion they may be hired back as soon as funding arrives, but management would not give a date.
The cable system maker says it's optimistic: It has two contracts worth $25 million to $30 million poised for development in Latin America, and two new products ready for release.
"We're trying to secure $10 million," says CFO Richard LaPointe. "We've already received $3.3 million in bridge funding."
Its investors committed to the funds, including $5 million in a third round announced in February, and the funds are intended to be "brought in over a certain period of time," LaPointe says. All rounds have been from the same pool of investors, including Strome Endeavor Partnership in Westport, Conn.
"Because of conditions in the financial markets, money is very tight," says President and CEO George Stathakis. "Even our investors have trouble raising monies. They're getting commitments, but it's slower than we anticipated."
"We did release staff until we can secure funding," LaPointe says. The lay offs primarily affected its engineering and operations groups.
Although its biggest customer is Israel's Matav — Aegis delivered 60,000 set-tops to the company last year, LaPointe says — the company's target market is Latin America. Aegis has built six systems there so far, and has two new contracts. Initial deployment is in 20 cities, and that will grow by nine cities "or so," over the next three years, Stathakis says. The initial contracts are expected to be deployed by the end of the year. The deals will stabilize the company's revenue stream and, management hopes, attract funding.
The Latin American clients are large companies, and Aegis is "confident" the rest of the market will follow the trend.
Aware of companies who are "falling by the dozens," Stathakis says he sees the company as "very fortunate. We're backed by an investor who is determined to stick it out. We have the formula and elements to make it happen," he says.