Less than a month after it placed No. 1 on a list of Massachusetts' best-performing public companies, Teradyne lowered its second-quarter guidance and laid off 180 people, for a total 12 percent cut in its workforce.
The test-equipment maker's $3 billion in revenues last year earned it first place on The Boston Globe's list of the state's top public companies, which was based on 2000 revenues. Since the end of 2000, however, the company says it has taken its hits from the industry downturn.
Business is down 50 percent from Teradyne's third-quarter 2000 peak, says CEO and Chair George Chamillard.
"Both our customers and Teradyne are facing an unprecedented level of uncertainty," leading to lower demand for its equipment, Chamillard says in a statement.
The 41-year-old company has been through seven or eight such cycles, says spokesman Tom Newman, but this one is the worst since the early '80s, and likely the worst yet, he says.
Teradyne now expects second-quarter revenue of $350 million to $375 million, rather than the previously announced $425 million to $450 million, or a loss of 5 cents to 10 cents a share. Special charges including those from the layoffs will reach 15 cents to 20 cents a share. The job cuts lowered labor costs by 25 percent, Chamillard says.
The company does expect an upturn; it just doesn't know when.
"We don't have any idea," Newman says. "When you're at this stage of a downturn, you can't see an upturn even (if it's) a month or two away. The only thing you can do is keep your head down," and work to position the company for an upturn. Meantime, the company may fall back on its interests in other areas, such as testing circuit boards and phone lines — "less volatile" industries, he says — to help it get through the semiconductor slump.
As far as the award, most in the top 10 were tech companies, Newman says. "Last year, technology was a great place to be." This year tech will be off substantially and that may be reflected in the list. Still, he says, Teradyne is one of only two companies to make it on the list twice.
"It's a matter of outlasting it and gritting our teeth at this point," he says. "Unfortunately."