Recession hits Ixia; layoffs announced
Ixia announced a “company-wide restructuring initiative” – essentially layoffs and a plan to not extend its contracts with some of its contractors. The company will be letting go of 75 to 80 people, or about 10 percent of its workforce.
After taking a $1 million charge for the severance packages and related costs, the company expects the moves to produce annual cost savings of approximately $6 million. Ixia also said it will write-down approximately $1 million to $2 million of slow-moving and impaired inventory in the second quarter.
“We are taking this action after much internal deliberation,” said Atul Bhatnagar, president and CEO. “Although we have a strong balance sheet and have remained cash flow positive, the current economic downturn has negatively impacted our revenues and profitability. We continue to be cautious about the economic outlook, and we think it is prudent at this time to align our operating costs with our business opportunities. These actions should put us in a better position to weather these difficult business times and should enhance our profitability as the economy, and our business, begin to rebound.”
Ixia announced in May that it was buying Catapult Communications. That acquisition appears to still be on.
Ixia reiterated its revenue guidance of $35 million to $40 million for the second quarter of 2009.