Expects lower first-quarter 2001 results; will trim 150 jobs

April 2, 2001

1 Min Read

SAN JOSE, Calif. -- Citing a weakened global telecommunications market, Redback Networks Inc. (Nasdaq:RBAK) today announced that it expects revenue in the current fiscal quarter ending March 31, 2001 will be approximately $85 to $90 million. The company also announced that it would reduce its workforce by approximately 150 people, which represents twelve percent of its total employee base.

The company will take restructuring charges of approximately $23 million related to excess facilities in the first quarter and $4 million in employee-related termination costs in the second quarter. In addition, the company will take first quarter charges of approximately $24 million for excess inventory as a result of certain product design enhancements initiated during the first quarter that were made to satisfy customer requirements. Excluding acquisition-related charges, stock compensation charges, and the restructuring and inventory charges noted above, the company expects a pro forma loss of approximately fifteen cents per share.

"These are challenging times, and while these actions are difficult to take, they are required for us to remain competitive," said Vivek Ragavan, president and chief executive officer of Redback Networks. "We are sensitive to the effects these cost reduction measures have on all of our employees. However, we are taking the necessary steps to improve our operating results, while at the same time continuing to invest in the next generation technologies that are so important for the future of the company."


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