'Cambium's overall revenue performance in Q2 was poor,' admitted Atul Bhatnagar, who will be replaced as the vendor's CEO by Morgan Kurk. The company also disclosed job cuts totaling 10%.
Cambium Networks said it would cut around 10% of its staff as it struggles to regain its footing following a disastrous second-quarter earnings report.
As part of the company's efforts to straighten its situation, Cambium said Morgan Kurk would be its new CEO "effective immediately." Kurk was most recently a senior executive at Honeywell International, but prior to that he was the CTO of equipment vendor CommScope. Kurk takes over from Atul Bhatnagar, who will continue to sit on Cambium's board of directors.
In an SEC filing, Cambium said it "initiated a corporate cost reduction to better align Cambium's cost structure with current economic conditions and position the company to achieve long-term targets and operating growth. The company expects to incur approximately $2 million in costs, primarily related to one-time termination benefits, contract termination costs, and other associated costs."
A company official confirmed to Light Reading the program would include a 10% reduction in Cambium's headcount, a figure that includes temporary workers. At the end of 2022, Cambium counted 650 full-time employees.
Overall, the financial analysts at Raymond James described the company's quarterly earnings report this week as a "big miss."
Wi-Fi struggles
During Cambium's quarterly conference call, Bhatnagar offered a stark assessment of the company's situation: "Cambium's overall revenue performance in Q2 was poor," he said, according to Seeking Alpha.
Bhatnagar explained that a big part of the problem was slow sales of Cambium's enterprise Wi-Fi products. He said the company's customers slowed purchases to absorb their existing inventory. But he also said Cambium's competitors "became very aggressive with pricing" as their supply chain troubles eased.
Overall, Cambium's sales for the period clocked in at just under $60 million, well down from Wall Street expectations of around $76 million and the company's own expectations of up to $80 million.
On the bright side, Bhatnagar said there remains strong demand for the company's fixed wireless and fiber products. Indeed, he said Globe Telecom in Spain and Wilbernet in South Africa have recently begun deploying the company's fixed wireless offerings across various spectrum bands.
Wider troubles
Cambium isn't the only vendor suffering rough seas. For example, 5G equipment supplier Ericsson said it would cut 750 employees from its North American business as it shutters its field services operation.
Separately, cell tower owner Crown Castle said recently it would discontinue offering network installation services within its cell tower business. The company said it would cut around 750 positions, or 15% of its workforce, as a result.
Network operators are seeing similar trends. "During the quarter, we took actions to rationalize our workforce as we continue to see benefits from rationalizing certain legacy wireline products," Verizon CFO Tony Skiadas said during the company's recent quarterly conference call. The company didn't disclose the extent of the cuts.
Similarly, Bloomberg reported that AT&T's HR chief, Angela Santone, is leaving the company amid thousands of job reductions there.
Broadly, wireless and wired network operators are cutting spending amid rising inflation and increasing competition.
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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