Off 17% of staff — Tucows lays

Layoffs impact fiber business and corporate overhead.

Tucows (NASDAQ:TCX) disclosed 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 following 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 sizable 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 firm will provide more details regarding 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 firm’s shares are trading at under $19 today.