Off Topic (GDC) but Sector related
CT General DataComm Layoffs,0333
General DataComm to lay off 200 workers
MIDDLEBURY, Conn. (AP) General DataComm Industries Inc., a
maker of computer switches, said it will lay off 200 full-time
workers and cut other expenses in a bid to stem heavy losses.
The layoffs represent about 12 percent of the company's work
force, which had stood about 1,700.
The company, which is headquartered in Middlebury, makes
switches for computers and networks at a factory in Naugatuck.
The move is expected to save the company $20 million. General
DataComm said it would take a charge of $1 million to $3 million
against first-quarter earnings to finance the restructuring.
''We've been pouring a lot of money into research and
development,'' said Robert S. Smith, vice president for
development. ''That's what's been driving the red ink.''
Wall Street analysts said the move should help the company,
which lost $42.8 million, or $2.11 a share, last fiscal year and
has not posted a profit since the fourth quarter of 1994. But they
questioned whether the action is too little, too late.
General DataComm still will have to move quickly to keep up with
the research and development of competitors, such as Cisco Systems,
Nortel and Ascend Communications, said Robert MacLellan, an analyst
with SBC Warburg Dillon Read.
''We're down to the last inning here, and it is time to do
something drastic. I would hope this is the beginning of a
multitude of plans,'' MacLellan said. |
