MicroStrategy Hires John Sidgmore as Strategy.com Chairman, Lays Off Workers
MicroStrategy also said late last month that it would cut 234 jobs, or 10 percent of its workforce, by the end of September as it implements a new distribution and pricing plan.
Sidgmore is widely recognized for helping to build Internet service provider UUNet Technologies, Ashburn, VA, into a multibillion-dollar business. Sidgmore became president/CEO of UUNet in 1994. UUNet, which has since been purchased by WorldCom, has grown from $6 million in revenue in 1994 to more than $4 billion today. Sidgmore said he would remain vice chairman at WorldCom.
MicroStrategy is hoping Sidgmore will help the company regain its footing after it restated three years of earnings recently, sending its stock plunging. The company was forced to lower its revenue figures after federal regulators issued new accounting guidelines for reporting revenue expected under multiyear contracts.
In February, MircoStrategy said it would turn Strategy.com -- which allows companies to alert their customers to developments in fields of interest they have requested -- into a separate, wholly owned subsidiary.
Also in February, MicroStrategy named Sidgmore to MicroStrategy's six-member board. He is now also a member of the two-person Strategy.com board. The other member is Michael Saylor, MicroStrategy chairman/CEO. Strategy.com has 430,000 subscribers.
"My role will be to build the Strategy.com board and bring in a couple of technology CEOs in the short term," Sidgmore said in a statement.
Long term, Sidgmore said he and Saylor would put together an executive team to oversee the company's day-to-day activities.
Sidgmore also said he would leverage his experience at UUNet -- WorldCom's Internet backbone unit -- to make Strategy.com exploit the potential of Internet and wireless technologies.
The company said the workforce cuts are an attempt to save more than $25 million.
"Our year-to-date financial performance is unacceptable, and we are firmly committed to strengthening our business," Saylor said.
Most of the layoffs will involve general and administrative workers. Some marketing and consulting jobs also will be cut.
MicroStrategy expects to incur restructuring charges of $4 million to $8 million this quarter in conjunction with this and other previously announced measures.