Copper Mountain announces restructuring plan

DSL equipment manufacturer Copper Mountain Networks yesterday announced a restructuring plan that reduces its 450-employee work force by 25% and includes resignations of the company’s chairman and chief financial officer.

The company said that the plan would reduce costs and improve operations in a stormy telecom market that has beleaguered its core CLEC customers and crippled its own business efforts.

The plan comes with a $5 million to $7 million restructuring charge that the company said would go on its first-quarter books. The charge will cover costs associated with severance packages, outplacement and fixed-asset write-downs.

Employee cuts primarily impact sales, customer and administrative support and operations positions. Copper Mountain said terminated employees would be notified immediately.

A spokeswoman for the company said research and development and engineering positions would not be affected.

“We want to concentrate on our products, and we needed to make some difficult decisions to go forward,” said the spokeswoman.

Although layoffs and product development will aid the company’s restructuring plan, Copper Mountain must concentrate on broadening its customer base and securing more high-profile accounts, according to one Wall Street analyst.

“This year’s a turnaround year for them,” said the analyst, who asked that his name be withheld. “But until the company can show more than just its CLEC customer base, it’s probably going to be difficult,”

Copper Mountain said co-founder Joseph Markee will leave his post as chairman and general manager of its public networks unit. Chief Financial Officer John Creelman also resigned.

The company’s current president and CEO, Rick Gilbert, will succeed Markee, who will remain on Copper Mountain’s board of directors. The new CFO will be Michael Stringer, former vice president of business development.

Copper Mountain said all transitions are expected to be completed by the end of this month.