S-A hands out pink slips

By SUSAN RUSH
From CED Broadband Direct, August 16, 2002

Roughly 400 Scientific-Atlanta Inc. employees will receive their walking papers, as the set-top box maker looks to trim costs.

The 6 percent reduction in its work force will translate to an annual $40 million savings, beginning in the second half of fiscal 2003, S-A said. The company will take a one-time charge of $15 million, or 6 cents a share, in the first half of the year, with the lion's share of the charge being accounted for in the first quarter 2003.

The majority of the cuts, which affected every sector of the company, were effective immediately, but some will occur over the next several months. Affected employees will receive a severance package and outplacement services, including job networking, resume assistance, access to job opportunity sites and coaching.

In July, S-A posted fourth-quarter sales of $390.1 million, down $229.5 million from the same period a year ago. A Q4 net loss of $15.7 million, or 10 cents a share, was reported. In the same quarter a year earlier, S-A reported net income of $73.4 million, or 44 cents a share.

Part of S-A's problems stemmed from Adelphia Communications Corp.'s bankruptcy. S-A de-booked $199.8 million in orders from Adelphia. The two companies have however reached an agreement that they will do business in the future, S-A said. The company shipped 805,000 Explorer set-tops during the quarter.