Tight net costs jobs at ihug

By MICHAEL FOREMAN

Ihug, the country's second-largest internet provider, is to lay off up to 60 of its staff of 350.

Managing director Nick Wood said ihug was facing higher costs while the value of its main source of revenue was dropping.

"Basically we are battening down the hatches in these difficult times," he told the Herald.

"The good news is our staff are well trained and there are plenty of positions available in the industry at the moment.

"They shouldn't have too hard a job finding other positions as they are highly sought after."

Mr Wood said the exact number of redundancies had not been decided but would focus on future-oriented parts of the company that were not yet producing revenue.

Some redundancies might occur among the 80 staff employed by the company in Australia.

"We are currently renegotiating a whole lot of things.

"The outcome of those negotiations will then translate into a number of redundancies but there's no fixed number.

"It could be anywhere from 10 to 60 people. We won't know for a couple of weeks."

Mr Wood said a 22 per cent drop in the value of the dollar this year had affected the company's operating costs because it bought internet bandwidth and computer hardware in United States dollars.

While record numbers of people were connecting to the internet, connections were cheaper, which had cut ihug's profitability.

This year, the company lost some customers to free internet providers such as zfree and i4free.

Then, in August, ihug was forced to match the price of rival provider Telecom after it cut flat-rate connections to Xtra from $39.95 a month to $24.95 a month.