Boston Internet startup Starry lays off half its workforce

Boston-based Starry, which provides wireless Internet service in several cities, said it is cutting its workforce by half due to a "difficult economic climate."Starry

Struggling wireless Internet service Starry is cutting half of its workforce amid a major cash crunch.

The Boston company has seen its stock price crater by 83 percent this year as it tries to build out its wireless service in a handful of cities, including Boston, New York, and Los Angeles. Starry had about 91,000 customers across seven markets at the end of September, a 66 percent increase from a year earlier.

“This is an extremely difficult economic climate and capital environment, and at present we don’t have the capital to fund our rapid growth,” chief executive Chet Kanojia said in a statement. “Because of that, we’re focusing our energies on our core business: serving multi-tenant buildings in our existing dense urban markets.”

Starry said 508 people would lose their jobs, including 175 in three Massachusetts offices. The cuts were from across the company, including people working in corporate, sales, marketing, engineering, manufacturing, and construction.

The company, which will report third-quarter results on November 2, said it was also withdrawing prior financial projections that it would reach 100,000 customers and $50 million of revenue in 2022.

Starry went public by merging with a special purpose acquisition corporation in March, raising $176 million to fund its growth. But that was less than half the amount originally planned, as investors were already starting to sour on SPAC deals. Now, its stock price is under $2 per share.

As part of the cost-cutting, Starry also implemented a hiring freeze and confirmed that it pulled out of a federal subsidy program known as the Rural Digital Opportunity Fund. The Federal Communications Commission last week said Starry had defaulted on its obligations under the program.

“While participation in this important program fit within our strategic vision in 2020, changing capital needs, changing capital environments, and continued success in the urban multi-tenant market forced a decision to take a step back,” Kanojia said.