Router manufacturer Avici Systems is to lay off nearly half its workforce in a bid to pull the company into profit.
The move comes after fourth quarter results showed losses of $8.6m on revenues of $6.1m. Full year figures showed the company, which makes carrier-class routers for major service providers, had run up a net loss of $24.7m.
A drastic restructuring will mean the loss of approximately 45% of all full-time and contract staff, while other spending will be cut back. The company is aiming for cost savings of $20m a year as it focuses on a more tightly defined core business.
Chief executive Bill Leighton said, “After a thorough review of our business, we have formulated a plan that will enable Avici to perform better for both our customers and our shareholders.
“We are committed to executing a more focused strategy aimed at driving Avici to profitability and positive cash flow.”