IT solutions and services provider Guardian IT has axed its Web
hosting division in a bid to prevent further spiralling
losses.
The company will close its Web hosting operations at Heathrow and
use the building as an extension of its business continuity and
data management core businesses.
The announcement came as Guardian reported a loss of £1.7m for the
last quarter. Richard Raworth, the company chairman, described the
first half of 2001 as, "one of the most challenging in the
company's history".
Raworth added, "The board has now decided that, as a result of the
excess capacity that has been created in the industry and the lower
than expected levels of demand, the group will exit the Web hosting
market."
The closure will cost Guardian £8m this year, and a further £4m
next year, for an estimated saving of £3m a year as of 2003. Twenty
staff will be made redundant.
Guardian started offering the Web hosting service last June when
the industry was expected to boom. "These expectations have not
been fulfilled and at the same time substantial excess capacity has
been created," said Raworth. "As a result, several Web hosting
companies worldwide are now in financial difficulties."
It is the second major blow for Guardian, after talks to acquire an
unnamed US company broke down earlier this year, leaving Guardian
with a £700,000 bill.