The carnage continues

Two more equipment vendors last week cited the economic slowdown in announcing layoffs, with Redback Networks also issuing an earnings warning.

For the quarter ending March 31, Redback said it will report a 15¢ loss per share. Consensus analyst estimates from Firstcall/Thompson Financial predicted the company would earn 4¢ per share for the quarter.

Much of the shortfall is attributable to deferred DS-3 revenues from two customers.

“Because our business comes from a base of major customers that order in large volume, the result is that ordering changes from even a few of these customers could have a significant impact on any quarter,” said Dennis Wolf, Redback's chief financial officer.

Vivek Ragavan, Redback's president and CEO, said the company will cut 150 positions, about 12% of its work force. The move is a far cry from earlier plans, which had Redback adding 300 to 400 employees at this time.

Also blaming the weakened U.S. economy, Alcatel said that it would eliminate about 1100 positions in its U.S. operations, including 800 full-time positions.

The layoffs are part of a concerted cost reduction effort. The spokesman said other initiatives include monitoring travel expenses more closely and reworking the company's supply chain and inventory management practices.

Also last week, Sycamore Networks and Extreme Networks issued earnings warnings. Sycamore said it expects an EPS loss of 16¢ to 19¢ — down from analyst estimates of a 5¢ earning — and will cut 140 of its 1100 workers. Extreme anticipates a loss between 6¢ and 8¢ per share — down from estimated earnings of 12¢.