Conxus Communications Inc. confirmed it had conducted a series of layoffs last week as part of a
“strategic refocus” that will affect employees at its headquarters in Greenville, S.C., and satellite offices
across the country.
The company would not comment on exactly how many workers would lose their jobs, but
industry sources said it could be as much as 60 percent of the work force.
John Franklin-a Conxus spokesman from
the public relations firm Robinson, Lerer and Montgomery-said people given notice were mostly sales and customer
service employees and more than half of them are located outside the Greenville headquarters. The company will
extend three weeks of company benefits to those laid off, he said, after which they no longer will appear on the
company payroll.
“In certain markets across the country, a customer may not have three people available to
drop by their office and answer questions. There may instead be only one,” said Franklin regarding the cuts in
customers service. However, “Our intent is not to have the customers notice.”
Conxus markets it
Pocketalk and Pocketext paging services mostly through resellers, which conduct their own advertising and sales
efforts. Motorola Inc. also helps in the marketing effort, as Conxus’ network is based on Motorola’s InFLEXion voice
paging protocol and uses Motorola Tenor voice pagers.
Conxus has coverage and offices in Boston, New York,
Philadelphia, Washington D.C./Baltimore, Atlanta, Dallas/Fort Worth, south Florida, Houston, Dallas, Chicago, San
Francisco and Los Angeles.
As to the strategic refocus behind the layoffs, Conxus said it will now dedicate all its
attention to its Pocketalk voice paging service, which it launched November of 1997, and less on the Pocketext
alphanumeric messaging service, introduced this January.
“Basically, what the company decided to do is
focus most closely on Pocketalk and Pocketalk-related channels,” Franklin said. “It’s a strategic shift to
maintaining that. A lot of the layoffs were people peripheral to that.”
No subscriber figures were available for
the Pocketext service at press time. According to Franklin, Conxus is not pulling the Pocketext service completely off
the market, but rather, will not extend resources to expand the service further.
“In essence, if its there, we’re
servicing it, but we won’t necessarily focus on growing that,” he said.
Pocketext is a two-way text messaging
service using the same network but different pagers than Pocketalk. Several other paging companies-much larger and
richer than Conxus-also sell two-way text messaging or plan to do so soon, such as SkyTel Communications Inc.,
PageMart Communications Inc. and Paging Network Inc.
The size and strength of these competitors may have
something to do with Conxus’ decision to abandon text messaging in favor of the voice paging niche market, of which
Conxus is the leader with 87,000 subscribers.
“This is a really competitive industry and you have to roll in the
direction you think things are heading,” Franklin said.
However, the voice paging industry has had a dubious
history recently. PageNet introduced its VoiceNow service in early 1997. Although the company enjoyed several
months as the exclusive provider of the InFLEXion technology, the service ultimately failed. PageNet signed fewer
than 3,000 VoiceNow subscribers nationwide and several PageNet executives lost their jobs in the ensuing fallout,
including former President and Chief Executive Officer Glen Marschel.
PageNet still provides services to the
VoiceNow subscribers it has left, but doesn’t advertise the service and recently wrote off its remaining Tenor device
inventory as a loss.
Conxus originally planned to introduce Pocketalk in September 1997, when PageNet’s
exclusivity on the InFLEXion technology ran out, but several delays involving network testing pushed the actual
launch to mid-November. Those delays meant Conxus spent more money on infrastructure while no operational
revenue came in.
Although the company claims Pocketalk is a success, the layoffs have raised questions regarding
Conxus’ financial situation. Conxus is a private company financed by several entities, including banks, venture
capitalists and other paging companies, such as Arch Communications Inc.
The company is relying on future
financing from these investors to fund operations until the service generates enough revenue to fund itself. How the
investors view the strategic refocus is not clear, but there is speculation Conxus may not meet the first-quarter
subscriber figures necessary to ensure additional financing.
“We’re talking with all our investors about the
success of Pocketalk and where it’s going, but so far nothing has been decided,” Franklin said.
In the
meantime, several other companies are poised to enter the voice paging market with technologies of their own.
OmniVoice Technologies Inc. is testing its VoiceOver platform, which allows carriers to digitize voice messages for
transport over FLEX data networks. Also making headway in the area is ReadyCom Inc., which markets more of a
portable voice-mail device using cellular technology, and Cue Corp.’s CueVoice, which transmits voice messages via
an FM subcarrier network.
