UK Telecom Firm Spirent to Lay Off
Aug. 30, 2001
LONDON (AP) _ Telecommunications concern Spirent PLC said Thursday it plans to lay off 500 employees, almost all of them at its operations in North America, in anticipation of tougher market conditions during the remainder of the year.
The cuts, which amount to 6.4 percent of the company's total work force, are part of a reorganization and cost-cutting effort aimed at shielding Spirent from the downturn in the global telecoms business. Spirent, an equipment manufacturer, has already cut about 250 of the targeted jobs, with the remaining layoffs to come within a few months, the company said.
More than half of Spirent's 7,800 employees work in North America, although the company refused to say where it will make the additional cuts.
Spirent's six-month earnings were higher than for the same period last year but still came in below analysts' expectations. Pretax profit before goodwill, amortization and one-off items was 73.6 million pounds ($106.7 million), up from 52.8 million pounds last year, while operating profit was 79.4 million pounds ($115.1 million), compared to last year's 59.6 million pounds.
The company posted interim sales of 458.9 million pounds ($665.4 million), up from 316.4 million pounds a year ago.
``Despite the poor telecoms market that we've already experienced over the past six months, the first half results are reasonably good,'' said Spirent chief executive Nicholas Brookes, speaking to reporters. ``However the market is deteriorating and we are reducing our costs to maintain profitability and cash generation.''
The slower than expected growth contradicted an upbeat assessment Spirent gave in June that its business outlook was stable. Among its customers are Cisco Systems, Lucent Technologies and Nortel Networks _ all of whom have warned they are being hurt by the economic slowdown in the United States and elsewhere.
U.S. sales account for more than 70 percent of Spirent's total sales.