Extreme gives a warning

(Telephony) Responding to a slowdown in the U.S. economy, Extreme Networks announced cuts in its work force and lowered guidance for its fiscal third quarter, which ended on March 31.

The company lowered its revenue expectations for the quarter to between $110 million and $115 million. Based on these numbers, Extreme should post a pro forma loss per share of between 6 and 8 cents. Earlier estimates on Firstcall/Thompson Financial predicted that Extreme would earn 12 cents per share for the quarter.

“Very late in the quarter, we were affected by delayed purchasing decisions by some of our larger customers,” said Gordon Stitt, president and CEO of Extreme. “Historically our quarters have been rather backend loaded. This quarter, we expected to see the same, but as we moved further into the month of March, we didn’t see the normal up-tick in orders. What we did see were a large number of delayed orders and requests for delayed shipments late in the quarter.”

As a result of the slowdown, the company announced that it is undergoing an effort to reduce its overall cost structure by 10%. Included in these plans are a 12% reduction of the company’s 1000-plus workforce and a cut in overall spending.