Competitive local exchange carrier Birch Telecom has cut 330 employees, or more than 38% of its workforce, the company said Tuesday, citing difficulties in adapting to network unbundling regulations passed by the Federal Communications Commission earlier this year.

The FCC decision to allow incumbent carriers to raise their wholesale rates affected approximately 90% of Birch’s lines, the CLEC said, forcing the company to rethink its strategy. Birch announced a commercial agreement for the use of BellSouth’s wholesale network in January, citing 28 such agreements with wholesalers at the time.

The company’s workforce reduction comes after a July 22 announcement that the CLEC was cutting 87 employees and closing sales offices in San Antonio, Texas; Austin, Tx., Topeka, Kan.; Wichita, Kan.; Tulsa, Ok.; and Oklahoma City, Ok.

Birch claims the latest reduction, which brings the company’s total workforce to 525 people, won’t affect service to its 130,000 customers in more than 50 markets.

Birch said it notified the affected workers Tuesday.