Clarent trims 27% from staff, posts 2Q loss

Clarent yesterday announced plans to cut 27 percent of its work force and shake up its senior management staff--moves that coincided with the company reporting a net loss for its second fiscal quarter.

The Internet telephony equipment maker said it will slash 270 from its staff of 1,021 during the next several weeks to concentrate its efforts on growth opportunities in the open-access market. The cuts follow the company’s decision in May to terminate 90 full-time and 20 temporary employees.

A spokeswoman said eliminated positions would be broad-based and that geographically, cuts would be spread evenly worldwide.

Clarent is moving from its direct-sales business model to work primarily through channels and with distributors, the spokeswoman said. The company’s OpenAccess solution trials launched in March have progressed around the world and structural changes are necessary to capitalize on immediate and long-term opportunities, according to the company.

“It’s going to be a long-term focus for the company, but given the demand for the product solution and opportunities there, the company chose to reorient itself,” the spokeswoman said.

Adding to the single-day bad news, the company posted a second-quarter net loss of $9.6 million, or 24 cents per share. The loss exceeded Wall Street’s loss expectations of 19 cents per share, according to Thomson Financial/First Call.

The net loss excluded a one-time restructuring charge of $20 million related to the lay-offs announced in May. The spokeswoman said no restructuring charges have been determined for the job cuts announced yesterday.

After finishing the first quarter with $61.2 million in revenue, the company projected at the time growth would be flat for the second quarter and increase sequentially 3% to 5% for the third and fourth quarters. The spokeswoman said that revenue guidance was revised downward to between $40 million and $43 million for the third quarter and $48 million to $52 million for the fourth quarter.

The restructuring moves included juggling upper management. Former CEO Jerry Chang became chairman of the board and chief strategist. Mike Vargo, who co-founded the company and most recently served as its chief technology officer, will be interim CEO while a permanent replacement is sought.

Additionally, company ex-President Barry Forman resigned after only a four-month tenure but will remain on Clarent’s board of directors. Arthur Rubinfield vacated his board seat but will serve as a marketing consultant. Former business unit head Daniel Fung is the new chief operating officer.

“It’s just a shuffling mapped to the new focus of the company,” the spokeswoman said.