May 22, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF
American Communications Services Inc. laid off 32 workers this week, as the Annapolis Junction-based telephone company continued a restructuring that claimed the job of its chief executive officer last winter.
ACSI said the fired workers, part of a staff of 550, were engineering, right-of-way acquisition, and network construction experts whose jobs were naturally running out because ACSI is almost done building its 50-city network to provide local phone service and data communications services aimed at businesses.
"We're turning down our construction and installation phases, that's all," said Martin McDermott, senior vice president of ACSI. "We were a three-year construction company and now we're a sales and marketing company."
That division between construction and marketing was the same one that led to the demotion of Richard A. Kozak from president and chief executive.
Kozak was demoted to chief financial officer after a dispute over strategy. He wanted to keep building networks in more metropolitan areas, hoping to make ACSI a bigger long-run player, while other executives wary of ACSI's debt load wanted to slow down the building and begin marketing and generating sales, including moving into businesses like reselling service purchased from local Bell companies.
Kozak believed the resale business had too little profit potential to be worth chasing.
"This company [did] a lot of construction and we did it very well," McDermott said. "How much longer to continue doing that is a question senior management had to deal with. It's more important that we build our markets and serve our customers rather than continue to build infrastructure to expand into new markets."
Kozak left after the demotion, which he claimed was barred by his contract. He has declined to talk about the situation and could not be reached yesterday.
But McDermott said ACSI has, on balance, been adding people rather than cutting them. ACSI had about 375 workers at the end of the year, but has boosted its sales staff to 98 from 19 as it finishes metropolitan networks and begins turning them on. Its revenue in the first quarter was $8.2 million, up from $800,000 last year, but the company is still not profitable.
He said ACSI will have its own telephone voice service online in 16 markets by the end of the year and will be reselling phone service it buys wholesale from the local Bell companies in 20 more markets. It will ultimately make voice service available in all 50 markets, at least by reselling Bell service, and will provide data transmission services using its own networks in all 50 cities.
ACSI is one of a new breed of local phone companies that has sprung up to challenge the Baby Bells' monopolies over the local part of the business.
Pub Date: 5/22/97
