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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (5484)	7/9/1998 7:05:00 AM
From: Glenn McDougall	Read Replies (5) \| Respond to of 18016

NEWBRIDGE JOBS ON HOLD By SIMON TUCK -- Ottawa Sun Newbridge Networks' recent struggles have delayed its aggressive hiring plans by about a year, the Sun has learned. The Kanata-based telecommunications firm announced a year ago this week it planned to hire 3,000-4,000 new employees by 2001. But disappointing sales and earnings in recent quarters, combined with a subsequent share price drop, has put the hiring plan on hold, a Newbridge official said. "The yardstick has been pushed back," said spokesman John Lawlor. "It's more of an adjustment on the schedule, rather than a revectoring." Contrary to the expected 1,000 or so jobs Newbridge expected to fill over the last 12 months, Lawlor said its payroll has been "relatively flat" since the announcement. "There was a pause, no doubt about it." As for the future, Lawlor said Newbridge expects sales to grow by about 25% a year over the next few years and expand its payroll at its previously projected rate. The only change, he said, is the timing. "I think maybe you (should) start the clock now, instead of when we made the announcement. "We're going to watch expenses very carefully, but at the same time we do see ourselves entering a new phase of growth and obviously we're going to have to build our human resources to continue to support that level of business." Newbridge's plans were, with Nortel's similarly lofty hiring projections, viewed as a pillar in the region's transformation from a public sector-based economy to one built around technology and the private sector. Yet despite the delay in the Newbridge jobs, the local economy has been on fire. Ottawa-Carleton's local unemployment rate fell to 6.8% in May, a remarkable drop from November's 9.2%. If Newbridge had been able to follow their stated hiring schedule -- assuming the new employees were from this area and no spinoff jobs were created -- May's unemployment rate would have been 6.6%. June numbers will be released tomorrow. Using the industry benchmark of three spinoff jobs for every one new technology position, the Newbridge hirings would have eventually created 4,000 jobs and dropped the region's unemployment rate to 6.1%. Vincent Ferrao, a labor force survey analyst with Statistics Canada, cautioned, however, that it's difficult to calculate what the extra 1,000 or so jobs would have meant to the local economy or unemployment figures. Not all new jobs trickle down to somebody without a job and many go to people from outside the region. "Employment would have increased but sometimes a booming economy attracts some people who wouldn't necessarily get jobs." It hasn't been the smoothest year for Newbridge. While the company continues to grow and its core products continue to sell, Newbridge has been hammered by last year's disastrous $146.5-million purchase of California-based UB Networks, increased competition in the ATM market, three consecutive poor quarters, and the Asian meltdown. One effect has been the hiring slowdown. Another has been a share price valued at 40% of its all-time high of $95, reached last fall. Newbridge stock jumped $1 yesterday in heavy trading to close at $38 as the firm announced that GTE has selected the Siemens-Newbridge multiservices switching platform for a new network in a school district near Los Angeles. The deal, which carries an undisclosed value, will allow students fully integrated videoconferencing over a single network. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ This is in keeping with the companies comments to keep expenses down and move margins up. Great news for the stock price. Regards Glenn