Aether Systems Inc., a wireless technology company whose work force has shrunk with its fortunes the past two years, laid off 50 employees this week.
The Owings Mills-based company now employs about 520 people, down from a peak of 1,300 in early 2001.
"We announced plans to reduce expenses earlier in the year and this is us acting on that plan," said Greg Abel, a spokesman. "It's setting up the company for what we believe is the right framework for long-term success."
The company cut about 225 jobs in March. It has trimmed another 130 since then through attrition and targeted layoffs in business areas that the company has exited, such as financial services. The company recently reported it had more than halved losses in its most recent quarter compared with a year earlier - a loss of 45 cents a share compared with a loss of $1.10 a share in the third quarter of 2001 - largely because it cut expenses by 50 percent.
The company also recently reported in a filing with the U.S. Securities and Exchange Commission that it has dissolved a business partnership it announced to some fanfare a year ago with America Online, the Dulles, Va.-based subsidiary of AOL Time Warner Inc.
The world's largest Internet service provider had teamed with Aether to help small and mid-size businesses that wanted to use wireless communications. The concept sparked Aether's stock price temporarily, but failed to generate ample business.
"In this technology economy, the AOL deal didn't materialize," Abel said, adding that general business reluctance to invest in information technology doomed the strategy.
AOL purchased 737,790 shares of Aether as part of the deal. A settlement the parties signed Nov. 4 absolves AOL from having to further invest in Aether. Aether gets back $5.3 million that it placed into an escrow account as part of the agreement. An AOL spokesman confirmed the end of the partnership, but did not elaborate.
"All companies try to put relationships together and some of them don't work out," said Richard Piotrowski, a vice president and senior analyst with SWS Securities Inc. in Dallas. "This one simply had more of a splash because it was AOL."
But others saw the deal coming undone as another sign of Aether's struggles as it seeks to compete with IBM Corp., Qualcomm Inc. and others in selling and developing wireless enterprise products.
"The overall thesis remains unchanged; the clock is ticking," said Seth M. Moshman, an analyst for GARP Research Corp in Towson.