What a way to end the week. Riverstone Networks Inc., ADC, Time Warner Telecom and Netro Corp. have announced staff cut plans.
Riverstone cuts deep
Riverstone Networks Inc. plans to reduce its staff by roughly 30 percent. The company expects revenue for the second quarter ending Aug. 31 to be between $10 million and $15 million. In June Riverstone predicted sales would be flat based on the first quarter's $30.1 million revenue number.
The revised estimate falls well below analysts' on average revenue estimate of $30.08 million, according to Thomson First Call. Riverstone expects the restructuring to save $7 million per quarter beginning in the third quarter of the current fiscal year.
In addition to the job cuts, Riverstone plans to cast a wider net to attract customers. The company will look for business outside of its traditional telecom markets, including federal and cable.
ADC sees future reductions
After watching its year-over-year revenue plummet 57 percent from $547.5 million to $235.1 million in the third quarter, ADC expects to further reduce its work force.
The company has yet to determine the number of employees that it will let go during the fourth quarter, but said during the first three quarters of the year, it has reduced its headcount by 25 percent.
In the third quarter, ADC reported a net loss of $629.1 million, or 71 cents a share. In the year earlier period the broadband company posted a net loss of $57.8 million. ADC's Broadband Infrastructure and Access unit experienced weakened sales during the quarter. The unit posted revenue of $156 million, down from the $329 million recorded in the third quarter 2001.
Looking ahead to the fourth quarter, ADC expects to post revenue of roughly $200 million, but warns that forecasting in this economic environment remains difficult.
Time Warner Telecom eyes profitability
With its eye on profitability, Time Warner Telecom Inc. is cutting its employee roster by 230. The cuts will save between $13 million and $15 million a year beginning in the fourth quarter.
Time Warner Telecom posted free cash flow results for the first six months of 2002, and says the streamlining will help maximize its free cash flow. The company plans to continue to evaluate its operations for ways to further reduce costs and optimize operating efficiencies.
The company had $324 million in cash and equivalents as of June 30.
Netro trims by 250
Fixed broadband wireless systems provider Netro Corp. is taking steps to bring its expenses in line with demand. The company plans to reduce its staff by 250 and write-down certain fixed assets. The moves will reduce operating expenses by roughly 10 percent.
The company will take a one-time restructuring charge related to the staff cuts of between $1 million and $1.5 million in the third quarter.