Extreme makes redundancies as growth slows

Second quarter profits and sales at Extreme Networks have scraped in at the low-end of previously issued guidance.

Second quarter profits and sales at Extreme Networks have scraped in at the low-end of previously issued guidance, but a sluggish showing in the North American theatre meant the firm did not post massive gains, and has been forced to lay-off 5% of its global workforce - approximately 35 heads - as it tries to continue to improve its financial performance.

Total sales at the vendor were up 7% to $85.1m (£52.6m), while GAAP net profits were $8.9m  including a $4.2m litigation settlement. This reversed a year-ago net loss of $1.4m. The non-GAAP figure was $5.1m.

CEO Oscar Rodriguez said that both EMEA and APAC posted a solid performance, and gave further details of an ongoing restructuring programme to get North America back on track; EMEA accounted for 47% of Extreme's Q2 sales against North America's 32%.

Rodriguez said: "We have initiated programmes aimed at driving additional efficiences throughout the company.

"We believe these actions are targeted to expand gross margins and accelerate our ability to reach out stated target of double-digit operating income," he added.

Extreme is now targeting sales to be roughly flat sequentially for the third quarter, which will close on 27 March.

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