Enterasys to cut workforce by 30%

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Enterasys to cut workforce by 30%

Enterasys Networks is to reduce its workforce by 30% as part of its restructuring, leaving the company with 1,700 employees.

Most of the cuts would be completed this week, a statement said. The restructuring would also include other cost savings, as well as lower capital expenditures and cuts in working capital.

An obvious target in this "rationalisation" would be Enterasys' Aprisma Management Technologies subsidiary. The company had planned to spin off the network management software unit in February and delayed that move. However, other businesses, such as the company's VPN (virtual private network) unit, might also be eliminated.

Enterasys has been hit by questions about accounting both in its Asia-Pacific operation and across the company. It announced the plan to restructure last Friday, after disclosing on Thursday that its chief executive officer (CEO), chief operating officer and executive vice-president of worldwide marketing had resigned.

The company has said it expects to report net losses for the first quarter ended 30 March, as well as for the fourth quarter of 2001, ended 29 December. It has delayed announcing final results for the fourth quarter and full-year results to investigate accounting questions arising from irregularities discovered in the Asia-Pacific region. The US Securities and Exchange Commission is also investigating Enterasys.

Last week, Enterasys announced William O'Brien had been appointed as interim chief executive officer and Yuda Doron as president.

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