Last week Zayo completed its $1.4B acquisition of Electric Lightwave, and immediately started working on the $40M in annual synergies it has planned for the integration. The first move was apparently to reduce headcount, taking on the unpleasant task of layoffs right off the bat.
According to reports late last week, some 200 of Electric Lightwave's employee base of about 1,100 are affected, including 10% of the workforce at the company's headquarters in Vancouver, Washington - just across the Columbia River from Portland, Oregon. Zayo says it is offering jobs to more than 400 in the Portland/Vancouver/Lake Oswego metro area, planning to maintain a substantial presence there.
Of course, that mathematics implies a higher percentage outside the headquarters, at least initially. And since Zayo doesn't have an equivalent legacy CLEC-type business to overlap with, it's probably concentrated more on the network infrastructure side as Zayo's operating teams take over management of ELI's underlying assets. It will likely take longer for Zayo's plans for the CLEC portion to become apparent, but I'm sure they'll talk about that a bit on next week's conference call.
It's a painful step, but not an unexpected one. Good luck to all those affected. Integra/ELI held on as an independent provider for many years longer than I thought they would.