Scientific-Atlanta Cuts 400 Jobs16 Aug, 2002 By: Hive News
Set-top box maker Scientific-Atlanta will reduce its workforce by approximately 400 positions, or about 6 percent of the company's total, a spokesperson said today.
Most of the reductions are effective immediately, although some will occur over the next several months. The positions being eliminated are from every sector and function worldwide. All affected employees will receive a severance package and outplacement services such as job networking, resume assistance, access to job opportunity sites and coaching, the spokesperson said.
The layoffs follow through on an earlier announcement that restructuring was in the works. Scientific-Atlanta expects the actions to reduce its costs and expenses by approximately $40 million on an annual basis, starting in the second half of fiscal year 2003. The company expects to take a one-time, pre-tax charge of approximately $15 million, or $0.06 per share, in the first half of the fiscal year, with the larger component in the first fiscal quarter.
The cable industry has been through a very difficult year, in which all of the largest cable operators experienced drastic declines in their market capitalizations, and one has filed for bankruptcy protection. These customers have reduced their capital expenditures as they focus on achieving positive cash flow. Scientific-Atlanta deeply regrets the effect of this downsizing on its dedicated employees. However, the company believes that these actions are necessary to align its costs with reduced sales levels.