NC officials cancel $32 million incentives package for Bandwidth
State commerce officials terminated a lucrative economic incentives package for Bandwidth Inc. after the communications software company failed to reach hiring goals.
The Raleigh company in 2020 announced plans to add 1,165 new high-paying jobs offering an average of $96,832 in annual compensation at its Raleigh headquarters over an eight-year period as part of a planned $103.4 million expansion project.
State economic developers had approved an incentives package worth up to $32.3 million over 12 years as part of the expansion, which state officials estimated would grow the state’s economy by more than $2.7 billion. The grant was dependent on the company meeting incremental job creation and investment targets.
On Tuesday, officials who approve incentives packages said the company had requested that the grant be terminated. The commerce department’s Economic Investment Committee voted to accept the request during its regular meeting.
Shortly after the incentives announcement, Bandwidth acquired Voxbone, another international enterprise cloud communications company, in a $519.4 million deal. The company completed a new headquarters building off Edwards Mill Road in Raleigh and continues to operate there. But the Voxbone acquisition caused the company to adjust growth and hiring plans across its markets.
“As we evaluate our business objectives, we believe that the company’s withdrawal from the grant will give us greater flexibility to drive thoughtful workplace planning along with our North Carolina growth strategy,” Daryl E. Raiford, Bandwidth’s chief financial officer, said in a letter to commerce officials.
Bandwidth hasn’t received any payments under the grant, officials said.
Companies such as Google, Microsoft, Rover and Zoom use Bandwidth’s platform to embed voice, messaging and 911 access into software and applications.
The company in November reported a loss of $5.1 million, or 20 cents per share, during its third quarter. Bandwidth. Earnings, adjusted for one-time gains and costs, came to 23 cents per share. The results beat expectations of analysts surveyed by Zacks Investment Research. The company also reported revenue of $152 million in the period, beating Wall Street forecasts. The company plans to report fourth-quarter and full-year results for 2023 on Feb. 28.
“We have maintained a stable and growing workforce in North Carolina, which we expect will continue to increase in 2024 and beyond,” company spokesman David Doolittle said in an email Tuesday.
