Since taking the helm at Paging Network last August, CEO John Frazee has sent out the signal that the nation's No.1 beeper operator had to change course. Its cut-rate pricing has helped PageNet boost its pagers in service 54%, to 10.3 million, since December, 1995. But the company has yet to turn a profit. So on Feb. 9, Frazee said PageNet would slash 30% of its staff--or 1,800 jobs--for a first-quarter hit of $65 million to $80 million. Says Frazee: "High growth that's not profitable is not good for anyone."

The 53-year-old former Sprint president expects the layoffs to produce up to $55 million in annual savings. He also aims to have Paging Network sell higher-margin services such as sports scores, enabling them to charge more for pagers. Analysts applaud the changes.

Retraining a downsized marketing staff won't be easy, Frazee admits. "We're not naive enough to think that the transition won't present challenges." But he's hoping Paging Network can get more bucks from fewer beeps.

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