Antec Corp. became the latest vendor to brandish the meat cleaver, announcing
Wednesday that it will slash 35 percent of its work force, essentially trimming
its staff of 2,300 down to about 1,500.
CEO and president Bob Stanzione told analysts and reporters about the cuts
during the company's fourth-quarter conference call. He said 90 percent of those
cuts have been completed, noting that more reductions could come if the company
does not rebound quickly.
In addition to the sluggish economy, Antec placed part of the blame on
AT&T Broadband, which halted shipments in November. Specific sales to
AT&T Broadband during the fourth quarter were about $50 million, down from
$131.1 million in the year-ago quarter, the company said.
For the quarter, Antec reported a wider-than-expected loss of $5.1 million
(13 cents per share), versus a profit of $6.3 million a year ago.
Stanzione said the MSO put in a large order for cable-telephony equipment
Jan. 1, but he expects the rest of the first quarter to be 'a bit lumpy' as
AT&T Broadband fine-tunes its inventory.
AT&T Broadband said last week that it does not plan to order any
additional customer-premises equipment during the first quarter, but it wasn't
as specific about its transmission-gear-purchasing plans.
Stanzione said the magnitude of the reduction in capital spending by service
providers 'caught us all by surprise.'
It has also caused the company to explore a possible sale of 'certain assets'
that do not have leading market positions. Stanzione declined to elaborate which
Antec units could be put on the block. Other short-term spending cuts will
include trade shows and advertising, he added.
Stanzione added that Antec's pending deal to acquire Nortel Networks'
interest in the Arris Interactive LLC joint venture will give Antec a global
footprint and an area from which to grow.
Antec and Nortel are currently restructuring the financing on that deal,
which should close during the first or second quarter of this year, he said.
Antec's chief was also confident that the capital-spending reduction and
recessive tactics of its customers will be temporary. The drivers of broadband
access are stronger than ever, he added, pointing to consumer thirst for
bandwidth, MSO requirements to add revenue-generating units and competition in
the local loop.
Stanzione was also optimistic about the cable voice-over-Internet protocol
market, noting the company's trial-equipment relationships with Adelphia
Communications Corp. and Charter Communications Inc.
Antec will also 'be in the hunt' with Time Warner Cable, which has recently
expanded its VoIP pilot efforts, he added.