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XM Lays Off 80; Needs $250 Million

XM Lays Off 80; Needs $250 Million

WASHINGTON Money headaches continue at XM Satellite Radio, and now the company has laid off 80 people in an effort to reduced expenses.
It is taking steps to reduce its cash consumption, reported to be about $90 million per quarter, to make its money last through the first quarter of 2003.
It is pursuing new funding and trying to renegotiate agreements with technology partners and strategic shareholders such as GM and Clear Channel to reduce or defer payments.
XM also is pursuing outside funding and hopes to have a package crafted by the end of the year and finalized in early 2003. The company needs at least $200 million in new funding in order to be able to break even by mid-2004.
President/CEO Hugh Panero said XM is not looking at a recapitalization, as Sirius recently announced.
The satcaster has pursued several ways to reduce expenses, including reducing the amount of advertising it places as GM increases its promotion of the service.
XM laid off 80 employees, leaving its workforce at around 400. Jobs were cut from most departments, including the programming, finance, marketing and technology divisions. XM drops at least two channels and those employees were let go. USA Today News is to be replaced with CNN programming. Teen talk channel Babble On is to be replaced with XM Live, featuring live concerts.
XM ended the quarter with 201,544 subscribers as of Sept. 30. This represented an additional 64,836 subscribers since the second quarter.
For the three months ending Sept. 30, XM reported revenue of $5.6 million.

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