Enterasys Networks, which incurred a net loss of $35.4 million in its second quarter, has begun cutting its workforce by about 16.5%.
It says the "workforce reduction initiative", which will see 270 employees lose their jobs, began during the quarter. However, African regional director Martin May says the cuts are mainly in the US and there have been no retrenchments in SA.
"In fact, we`re employing," he says.
May says the Europe, Middle East and Africa region has performed very well. The South African business was the third or fourth best performer in the area.
The group`s net loss includes an $8.2 million special charge related to restructuring costs and a $16.1 million charge for the write-down of certain minority investments. The group incurred a net loss of $14.5 million for the first quarter of the year.
Net revenue for the quarter, which ended on 28 June, increased by 3.8% to $108.4 million, compared with net revenue of $104.5 million for the first quarter.
Product revenue increased 7.4% sequentially from $74.5 million to $80 million.
At the end of the quarter Enterasys had $215.5 million in cash and marketable securities on hand, including $19.9 million of restricted cash.
"Our product sales growth coupled with our continuing cost reduction efforts represent significant steps forward in bringing the company`s cost structure and resources in line with our strategic goals," says CEO William O`Brien.
"We remain focused on aligning our resources more closely with industry best practices and better positioning the company for long-term growth. By doing this, we will deliver greater value to our customers, partners, employees and shareholders.
"We remain optimistic about our business opportunities but cautious in the short-term given the lingering uncertainty about the global economic environment. We remain confident in our ability to execute against our strategy and committed to our stated goals."
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