Symbol Cuts 700 Heads
Wireless equipment vendor Symbol Technologies Inc. (NYSE: SBL) is to slash 700 jobs -- 12 percent of its 5,700 headcount -- and has warned of a shortfall in its second-quarter 2005 outlook (see Symbol Touts Restructuring Plan).
The Holtsville, N.Y.-based vendor manufactures a range of wireless products, including barcode scanners, mobile computers, payment systems, printers, RFID kit, and wireless LAN equipment.
Symbol blames a continued downturn in the global retail market for the staff cull, a restructuring it hopes will result in quarterly savings of approximately $15 million. “It all stems from the exposure Symbol Technologies has to the retail segment,” said president and CEO, Bill Nuti, in a conference call. “When the retail segment gets a cold, we catch the flu.”
Nuti was keen to stress that Symbol’s second spot in the enterprise wireless LAN market will be unaffected by the shuffle (see Enterprise Sales Soar in '04). “We do not believe we are losing market share. We have evidence from industry analyst companies that we have in fact gained market share across our core businesses.”
Symbol’s head man did not specify where exactly the cuts would be made, instead choosing to talk up the company’s plans to boost its sales presence in Asia/Pacific and in vertical markets outside of the retail sector. “We have self-funded, inside of this $15 million reduction, an ability to hire approximately 70 new sales people... They will go into underpenetrated markets, both geographically and vertically.”
In addition, Symbol has lowered its sales outlook for the next quarter. The company expects second-quarter revenue and earnings to be approximately $440 million and $0.02 to $0.05 per share, compared to a previous forecast of revenue in the $460 to $470 million range and earnings per share in the $0.07 to $0.09 range. For the full year 2005, Symbol expects revenue growth in the 3 to 6 percent range, down from previous guidance at the low end of the 10 to 15 percent range.
Shares in Symbol had fallen 6.59 percent at press time, to $9.78 per share.
— Justin Springham, Senior Editor, Europe, Unstrung