Comdisco Inc. is disconnecting its network services business, firing 96 of its 3,200 employees and transferring about 100 other workers to other positions in the company.
Terminating the networking unit, which helps businesses set up and monitor their computer networks, is the latest effort by Rosemont-based Comdisco to refocus its business following a spectacular–and ultimately destructive–detour backing a range of Internet-related ventures.
Last month, Nicholas K. Pontikes, the 36-year-old son of the company’s founder, resigned as chief executive of the technology services, leasing and investment firm, citing the need for more experienced leadership. Phil Hewes, who was named the company’s interim president and chief executive, had recently told analysts that Comdisco was considering getting out of the networking business.
The network services business, formed in 1995 after Comdisco acquired a small Minneapolis outfit, helped companies assess their networking needs, implemented new systems and monitored the networks around the clock. But with only 37 customers, the unit couldn’t compete with larger players in the industry.
“We had been losing money in the business and we really found it difficult to achieve the scale we needed to make the business profitable,” said Mary Moster, a Comdisco spokeswoman.
Moster said the company will shut down its around-the-clock network monitoring operations, though the company still will help companies assess and implement networking systems as part of its other activities. About half the layoffs announced Tuesday will be local, she said.
She declined to say whether the company will take a write-off related to the layoffs, saying that matter will be discussed in a conference call with analysts Jan. 31.
The decision by Comdisco to shut down its networking business is an effort to concentrate on its other operations, including data storage, Web hosting and business continuity services.
Comdisco’s stock went on a wild ride during the past couple years, reaching an all-time high of $57.25 in March on the strength of its Internet-related investments. Shares cascaded along with tech stocks in the spring and continued to fall later in the year after Comdisco pulled the plug on a high-speed Internet service provider it once had planned to spin off.
The company’s stock rose 38 cents Tuesday, or 3 percent, to close at $12.50.
