Ailing cable TV operator
will announce a restructuring Tuesday that the company says will result in "significant" layoffs.
Charter, the nation's third-largest cable operator, says it hopes the changes will eliminate redundancies and improve communications.
Over the past year -- an especially difficult one for the cable industry -- Charter has been suffering from a variety of problems, including a
decline in its customers for basic cable service and a grand jury investigation that has
sidelined its chief operating officer, David Barford.
Shares in Charter, down more than 90% from their 52-week high, rose 8 cents Tuesday morning to trade at $1.60. The company is scheduled to make an investor presentation at 1:30 p.m. EST Tuesday at a Credit Suisse First Boston media conference in New York.
Charter plans to reorganize its structure into five geographic divisions, each reporting to the company's new executive vice president of operations, Maggie Bellville, a 20-year veteran of cable and telecom firms including
. In a statement, Charter CEO Carl Vogel termed the reorganization "the next natural step" following the purchase and rebuilding of systems acquired in 14 different deals over the past three years.
Charter, which operates in 40 of the 48 contiguous states in the U.S., last reorganized less than a year ago, going from two to three geographic divisions and, within those divisions, consolidating 12 operating regions into 10. The "operating region" structure will be eliminated in the new reorganization, says a company spokesman, as part of an effort to eliminate layers of management and allow decisions to be made "closer to the customer." Within each of the five new geographic divisions, however, systems will be divided into "local marketplaces" averaging 250,000 customers apiece.
The company says it will disclose the estimated savings from its layoffs and restructuring next February, at the time Charter reports results for the fourth quarter of 2002. The workforce reductions will be determined by the end of December, says Charter; the company says it expects that "the large majority" of the restructuring will be completed within the first quarter of 2003.
Charter, controlled by
billionaire Paul Allen, counts 6.7 million subscribers.