ADC drops DSLAMs, will exit optical

ADC Telecommunications said today that it has shut down its DSL access multiplexer product efforts and also plans to get rid of its optical components business as part of a continuing agenda to reach profitability.

The Minneapolis-based vendor’s withdrawal from the DSLAM business had been rumored for several months since ADC Chairman and CEO Rick Roscitt had expressed his disappointment with the sluggish performance of the overall DSLAM market. He said last spring that the company was focusing its DSL capabilities into its newly reconfigured iAN Broadband Access Gateway, a next-generation digital loop carrier. The iAN product is currently running through customer trials.

ADC’s plan to drop out of optical components comes as more of a surprise. Though the market for optical components such as tunable lasers has been slow to develop, analysts have retained expectations for long-term growth. “Though there is some long-term potential, we are focused on the short-term realities of reaching profitability,” said a company spokesman. “We’re focusing on the areas where we see our best business prospects.”

ADC said it will dispose of its 350-employee optical components unit by Oct. 31, but it has not decided whether it will sell or shut down the business, which includes facilities in Sweden, Australia and Minnesota. The company has hired Lehman Brothers to carry out an exit plan.

Also this week, ADC reportedly laid off several employees, though the spokesman wouldn’t confirm a specific number of job reductions. ADC has 9200 employees as of this week, 3300 fewer than it had last November at the beginning of fiscal year 2002, he said. He also indicated the company will further reduce it work force by the end of the year as part of its strategy to become profitable.