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LightSquared defaults on payment to satellite partner, plans to cut 45 percent of its workforce

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Things continue to look grim for LightSquared's ambitions to build a new LTE network, with the company defaulting on a payment to a UK-based satellite partner and announcing today that it will lay off almost half of its workers.

LightSquared Logo 600
LightSquared Logo 600

Things have been looking grim for LightSquared's efforts to build a new LTE network, with the FCC recently deciding to reject its network application due to concerns over GPS interference. The bad news continues to come, with the company defaulting on a payment to one of its satellite partners on Monday, and announcing plans to lay off almost half of its workforce today. The partner in question, UK-based Inmarsat, was owed an installment payment of $56.25 million. For its part, LightSquared is contending that there are several outstanding issues between the two companies at the moment, and that the payment is not technically due yet, but that didn't stop Inmarsat from informing LightSquared that it would be terminating their agreement if it does not receive payment within 60 days.

Making matters worse was LightSquared's announcement today that it would be laying off almost half of its 330 employees in a "prudent and necessary cost savings measure to ensure the long-term success of the company." While LightSquared is due to be paid $65 million from Spint next month should its deal with the carrier come to an early close, without federal approval it's hard to see how even that cash infusion will be able to turn around LightSquared's fortunes.