Around six to eight months ago, Charles Brown, the director of sales and marketing for Waverider Communications Inc., a Toronto-based provider of fixed wireless Web access products, was pondering how a small company of 116 employees was going to keep up with the increase in business.
On Monday Brown — along with other top executives in the company — was trying to deal with restructuring that saw its workforce cut by 50 per cent.
Of the 56 employees who lost their job, the majority came from its Toronto, Calgary and Australia offices. There were some workforce cuts in its Nashville, Tenn., office, Brown said.
“Waverider was not going to grow as fast as we planned,” he said, blaming the downturn in the wireless broadband market and the general economic slowdown as the two main reasons for restructuring.
In addition, the executive staff has agreed to waive all compensation and other key management personnel have agreed to a 25 per cent pay reduction until the shareholder rights offering has been completed.
This announcement comes on the heels of two of Waverider’s biggest contract wins.
Last month, Fairlawn Technologies Ltd. purchased WaveRider’s Last Mile Solution products to establish a wireless network to provide Internet service to its business customers in Lagos, Nigeria.
And Buffalo, N.Y., purchased the Last Mile Solution wireless products to deliver Internet access and services to its residents in early August.
“Those were good wins,” Brown said. “It’s just that the market has slowed and we grew our organization to a certain size anticipating a larger revenue stream. As the market slowed down and you down hit those numbers you got to curb your expenses to keep your business going,” Brown added.
Waverider does have commitments to date for the purchase in excess of $500,000 of promissory notes by certain large shareholders, officers and directors of the company of a planned $1,000,000 total offering. This, along with some bridge financing, Brown believes will return Waverider to profitability within 12 months.
“With the staff reduction we got the cash we need to work on the new business plan. It will position us favourably to go back to existing shareholders with a shareholder rights offering. We are still positioned well in the market. We still have a full suite of products available that we are selling throughout the world that have been well-received from telcos, municipalities, VARs and ISPs,” Brown said.
He also anticipates that the demand for fixed wireless broadband will grow internationally and in North America.
“It was the licensed companies (that soured the market). The LMDS operators all started to go belly up like Windstar and those sorts of organization. And, that made people question if there was viability in wireless broadband,” Brown said.
According to him, when people began question the viability of wireless broadband, it started to make financing tight for all the organizations in the wireless broadband space.
As for Waverider’s channel partners, this restructuring should not affected them in any way, Brown said.
Waverider, he said, still has plenty of product available and can fullfill any order.
Early last September Pomeroy Computer Resources, a large U.S. VARs signed an agreement with Waverider and took an initial 50 units of WaveRider’s NCL1170 2.4 GHz wireless bridge/router to be immediately deployed for its customers.