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PCTEL Pares Staff by 11 Percent, Restructures

Slowdowns in PC spending continues to thwart businesses as connectivity provider PCTEL Inc. Thursday said it must cut 11 percent of its staff worldwide and restructure.

The firm will restructure its legacy voiceband business to focus on broadband, embedded and wireless sectors. Angling to clear the path to profitability, the move will also constitute a hiring freeze and expense controls.

The latest dire news comes a month after President and Chief Operating Officer Bill Roach said fourth quarter 2000 earnings would be lower than expected.

Roach said then: "A sharp decrease in PC demand has clearly had a significant negative impact on our sales for the quarter just ended. We believe this weak demand creates uncertainty for the first half of 2001."

Dire as it was Roach's prediction turned out to be true.

On Thursday, Roach said the staff cuts and restructuring are a small slice of company-wide reorganizations, which includes "forthcoming management changes."

"We believe these steps, which will improve the cost-effectiveness of our legacy PC modem business, coupled with our investment in off-shore development capacity and our focus on new opportunities in broadband connectivity, embedded and wireless markets, will properly position PCTEL for the future," Roach said.

Still, the firm had enough in the coffers to nab Taiwan-based BlueCom Technology, a MMX signal-processing (MSP) technology firm on Jan. 17 to support PCTEL's legacy analog connectivity business.

"Force reductions are always painful," Roach said. "On the other hand, we feel confident that this new structure will result in a more cost-effective voiceband business and help us focus on new product initiatives that will really make a difference to our future."