Tekelec plans to cut up to 15 percent of workforce

Posted May 5, 2011

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— Tekelec (NASDAQ: TKLC) announced earnings for first quarter 2011 on Thursday, foreshadowing workforce reductions as the company continues working through a restructuring plan started last quarter.

Revenue for first quarter of 2011 was $107.8 million, down 7 percent compared to $116.0 million for first quarter 2010.

The company’s orders were $69.5 million for the quarter, up 22 percent from the same period in 2010, suggesting that the company's move into next-gen technology is gaining ground.

In the first quarter of 2011, the company initiated a restructuring of its operations designed to align its operating cost structure with its current and expected business opportunities.

As part of this restructuring, the company expects to reduce its workforce up to 15 percent, with reductions both in the U.S. and certain international locations.

No specific job cuts were provided for the Morrisville headquarters.

Tekelec has more than 25 offices around the world serving customers in more than 100 countries. Tekelec has approximately 1,250 employees worldwide – 675 in Morrisville.

Personnel reductions are expected to occur in phases through the end of 2011.

“We also had to make some tough decisions during the quarter and initiated changes to improve the operating performance of the company by aligning our cost structure,” said Krish Prabhu, interim president and CEO.

In February, Tekelec announced an aggressive cost-cutting strategy but said layoffs would be a last resort. Tekelec also forecasted in February that a tough year lie ahead for the company in 2011; with revenues estimated to be between $360 and $400 million. That's well below 2010's revenues of $424 million.

Tekelec shares closed Wednesday at $8.15, up 13 cents. The stock has lost more than half its value in the past year.


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  • WRALblows May 5, 2011

    Reduce the workforce, cut benefits and give the CFO his annual bonus for increasing revenue. Queue the national anthem and raise the flag.

  • Keepin_it_real_in_NC May 5, 2011

    How's that Hope and Change working out for y'all?

  • kendradad May 5, 2011

    Another company focused on the short-term quarterly results instead or realizing their employees are probably their greatest asset. Instead most companies cut employees first because it makes an immediate impact to the bottom line.
    I understand companies are only in business to make money but it is no wonder there is no loyalty to a company anymore by it's employees. It would be interesting to see what cost that would avoid if it was possible to measure.
    I am so happy that I am out of the big corporate world, and doing just fine thank you. My blood pressure is a lot lower too. :)