Internet data storage
company lays off
22 employees

Pihana Pacific trims its
Honolulu staff by 10 after
dropping its expansion plans

---

By Tim Ruel
truel@starbulletin.com

Hawaii-born Internet data storage firm Pihana Pacific Inc. last week fired 22 employees, or 12 percent of its work force, in an effort to hold onto its multimillion-dollar capital base in the face of sluggish sales.

The firm cut 10 jobs in Honolulu, slicing the local work force to 75 from 85, said Pihana spokeswoman Linda Brock.

Founded early last year, Pihana has raised $240 million in financing to expand its collection of regional data centers into seven major Pacific Rim cities including Los Angeles, Tokyo and Sydney.

Pihana provides capacity for major companies to store data, but businesses have been slow to sign on.

Most of the firm's data centers in Asia are 20 percent to 30 percent occupied, while Honolulu is at 35 percent and Los Angeles and Tokyo are at 40 percent, Brock said.

Similar firms have also faced financial trouble. California-based data center firms Exodus Communications Inc. and Colo.com Inc. have filed for bankruptcy.

Customer growth halted following Sept. 11 and will probably stay that way through the end of the year, Brock said. "They're not about to sign a contract," she said.

In the spring, Pihana dropped its plan to open a second data center in Japan, and in summer the firm shelved its Taiwan expansion. Pihana also moved its operations center and regional headquarters to Singapore after the company got a 10-year tax holiday.

In June, Pihana's founder and chairman, Lambert Onuma, stepped down to explore new ventures, Brock said.

Onuma, born on Oahu, had previously worked for mainland network services firms Interlink Computer Sciences Inc. and Digital Equipment Corp. Onuma could not be reached for comment yesterday.

Pihana is still negotiating with several new clients, and if only a fraction of the deals are signed, most of Pihana's data centers would reach 50 percent occupancy by early next year, Brock said.

Pihana has $100 million left in reserves, enough to last a rough business climate into 2003, but operational cutbacks were necessary to protect the reserve, Brock said.