Helio, Sky Dayton's wireless-service provider, is cutting back, laying off one out of seven employees, mostly in sales. It's now concentrating efforts, the company says, on its 20 largest markets. The company only has 100,000 subscribers, and 600 employees even after the cutbacks, and is expected to lose more than $300 million this year. EarthLink, the troubled Internet service provider founded by Dayton that's one of Helio's two backers, is rumored to be looking to pull out.
A company spokesperson says EarthLink remains behind Helio. But it only makes sense that EarthLink, having just laid off 900 employees of its own, might be looking to cash out its stake in Helio by finding a buyer. That would give EarthLink some immediate cash to shore up its operations, and spare it from making further investments in Helio; having put $220 million into Helio, its expected to sink another $100 million into the wireless carrier this year.
The only problem with this rumor: Having cut back on its municipal Wi-Fi efforts, if EarthLink pulls out of Helio, too, it will have precious few growth businesses with which to tantalize investors. Dayton, of course, will have a much more pressing problem: 600 mouths to feed.