Cable & Wireless Plc [CWP] has off-loaded its loss-making US operation as a separate legal entity and is making progress in ensuring it will be able to exit the US while maintaining continuity of services to customers and reducing the costs of continuing operations.
However, the UK company has yet to divulge how it will finally wind up its US operation amid reports that it is considering putting the business into bankruptcy protection.
Since it announced the decision to wind up its US operations in June, Cable & Wireless (C&W) has closed eight data centers, which has reduced its lease commitments by GBP200 million ($334 million), and its US headcount by 1,000 to 1,700. However, this still leaves 14 data centers with GBP600 million ($1 billion) of lease commitments to close down, hence the bankruptcy fear.
With 20% of its data center capacity in use, the US has been a disaster area for C&W since it plunged into the hosting business with the $340 million purchase of Digital Island and the assets of bankrupt Exodus Communications Inc for $850 million. It is now evaluating its US exit options.
This article was based on material originally published by ComputerWire.