Struggling networking company Newbridge said it is open to takeover bids as it reported weak second quarter results and a major company restructuring.
The company said it would cut around 700 jobs as a result of the restructure, representing more than 10 per cent of its total workforce. The jobs will be mainly cut from the areas of overhead and administration.
For the second quarter ended 31 October 1999, Canadian-based Newbridge reported revenue of C$481 million compared to C$456 million a year earlier.
Profit was C$301.7 million including a big non-recurring gain up from C$53.3 million. Not including the gain, which was related to the sale of investments, the company said profit was C$21.5 million, compared to C$48.2 million in the same period a year earlier.
Terence Matthews, chairman and chief executive, said the disappointing results had forced the deployment of a "comprehensive strategic action plan" which will include the outsourcing of volume manufacturing and global customer service, and headcount reductions.
He said the company will "sharpen" its product portfolio and R&D focus to concentrate on its areas of strength. In particular, ATM+IP switches and broadband wireless, and digital subscriber line (DSL) access product families, he said.
In a conference call yesterday, Pearce Flynn, president and chief operating officer, told Wall Street analysts the company was not ruling out a takeover bid, which has been the subject of speculation for several months.
"I wouldn't comment on specific takover talk, but every strategic alternative is on the table," he said.
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