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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: WiseGuy who wrote (3204)	12/16/1997 6:03:00 PM
From: jkb	Respond to of 6980

From Techweb. -Jay _________________ Cabletron Cuts 600 Workers (12/16/97; 12:06 p.m. EST) By Gabrielle Jonas, TechInvestor Struggling Cabletron said Tuesday that it is cutting 600 employees, or "less than 10 percent" of its worldwide work force. The Rochester, N.H., company said it will take a $25 million to $30 million pretax charge to realign its market focus. The new strategy will streamline Cabletron's distribution and emphasize partnerships and acquisitions. Cabletron said its restructuring would include increasing the distribution of its products through distributors and resellers, "aggressively developing partnership and acquisition opportunities," and improving its international standing. The restructuring will be implemented during the next few months, the company said. The restructuring is intended to yield about $55 million a year in savings, beginning this quarter, the company said. Cabletron has some products in the works it said it hopes will turn things around. The company will continue trying to reshape itself into a lower-end equipment supplier via 10/100-megabit-per-second Ethernet switch modules for its products. These include a $17,000 26-port module for the MMAC-Plus, renamed the SmartSwitch 9000 to match the rest of its product line. Cabletron also is unveiling a 16-port version for the SmartSwitch 6000 that will ship next month for about $9,000. The company recently acquired Digital Equipment's networking operations, and is competing against Cisco, which is drubbing Cabletron with its turnkey networking systems. Cabletron has hired Drake, Beam Morin, an international career management and out-placement firm, to assist the canned employees. Given Cabletron's recent problems, the restructuring announcement was not unexpected. Earlier this month, blaming longer sales cycles and increasing costs, the company said it expected to post lower-than-expected earnings and a revenue shortfall from the year before. At the time, Cabletron said it expected earnings of 8 cents a share to 12 cents a share for the quarter, and revenue in the range of $330 million to $340 million. Wall Street was expecting earnings of 39 cents a share. In the year-before quarter, Cabletron reported revenue of $361 million. Wall Street is now looking for earnings of 11 cents a share. On the heels of Cabletron's profit warning, Donaldson Lufkin and Jenrette removed the stock from its recommended list, saying Cabletron "missed a number of windows of opportunity," and the company didn't "have a lot of time to turn things around before it gets to a very marginal market share." DLJ said Cabletron "won't be able to build momentum for the next six months, minimum." In late-morning trading, Cabletron [CS] was up 1/8 to 14 1/8.