Adaptec To Take $10 Million Restructuring Charge
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Following in the footsteps of other notable high-tech companies, Adaptec, Inc., announced Friday its intent to scale back operations and take a $10 million restructuring charge, blaming an industry-wide investment cool down.
Fiber-optics maker Corning, Inc., laid off 825 workers Thursday, two weeks after lowering its revenue growth forecast for 2001. The news came as no surprise since its biggest customer, Nortel Networks, announced drastic earnings reductions in the quarter and cut 10,000 jobs recently.
The Milpitas, CA-based data storage company also warned investors that earnings projections for the fourth quarter will likely fall short, and adjusted its earnings per share to 10 to 15 cents per share.
Bob Stephens, Adaptec president and chief executive officer, said the details of the restructuring plan will be released sometime before the end of the quarter, a move prompted by a decrease in consumer and business spending.
"IT investments are down industry-wide, and this trend is expected to continue over the next several months," Stephens said. "We are taking the steps we feel are necessary to scale our costs to match the current business environment."
The necessary steps likely involve staff cuts, a route taken by many high-tech industries facing a market slowdown.
According to Stephens, the goals of the restructuring program are to support future growth opportunities, focus on investments that grow top-line revenues, and restore operating margins.
Adaptec officials expect to trim back operations expenses by more than $7 million per quarter, although details of the plan remain under wraps.
Investors took the news in stride, with Adaptec
shares falling only 3/16 to 10 11/16 at press time.