Just as the dust settled on ADC Telecommunications Inc.’s failed attempt to merge with Andrew Corp., ADC announced plans to lay off about 225 of its 8,200 employees as part of a restructuring effort. Interestingly, the news came on the heels of Andrew’s own restructuring plan.
In a recent Securities and Exchange Commission filing, ADC said the pink slips are a necessary means of reducing costs. The cuts will be spread across all of the company’s geographic regions, including Europe, The Middle East, Africa, Asia Pacific and the Americas.
The company said two facilities will be shut down and their operations will be consolidated within other locations, though ADC didn’t name which facilities it plans to close.
With its layoffs already under way, ADC confirmed that it plans to finish its restructuring initiative by June, incurring costs of between $10 million and $12 million.
And even though the company’s stock was not greatly impacted by its layoffs announcement, Lehman Brothers Equity Research seemed cautious in a recent report covering ADC, noting, “We believe the October quarter is progressing as expected, and the company is tracking to meet our sales forecast of $340 million. (vs. guidance of $295 million to $310 million).” Still, the firm cautioned, “At this time, however, we do not yet see a meaningful bounce back in the January quarter at key accounts who were incrementally soft for ADC in the October quarter, such as Verizon for fiber to the premise, BellSouth for access, Cingular Wireless or Deutsche Telecom. Until we get better visibility into improving trends at accounts such as these, and given our sense that consensus January quarter expectations for ADC may to too high vs. the guidance, we cannot become more positive on ADC shares.”
Meanwhile, Andrew said its reorganization plan is aimed at “capitalizing on the company’s momentum” and addressing growing opportunities in the wireless infrastructure market.
Andrew set in motion an overhaul to its executive team along with a re-grouping of the company’s product lines. By Oct. 1, the company said its five product groups will be consolidated under two new units: Wireless Network Solutions and Antenna and Cable Products.
Wireless Network Solutions will be headed by Mickey Miller, formerly president of Andrew’s Base Station Subsystems group. The new product group will house Andrew’s former Base Station Subsystems, Network Solutions and Wireless Innovations groups.
John DeSana has been tapped to head the Antenna and Cable Products team, which Andrew said will include its former Satellite Communications Group and will contain the vast majority of its portfolio of antennas, cables and related products.
Bob Hudzik, formerly president of Andrew’s Wireless Innovations, is slated to step up as senior vice president and chief human resources officer, replacing Karen Quinn-Quintin, who is leaving the company. Morgan Kurk, vice president of research and development, has been appointed acting general manager of Wireless Innovations, reporting to Miller in Wireless Network Solutions.
Corporate functions including Procurement and Technology, Strategy and Corporate Development will be folded into the two new operating segments. The moves will push J.C. Huang, chief technology and strategy officer, and Fred Lietz, vice president of procurement, out the door. Also leaving is Jim Petelle, vice president of law and assistant corporate secretary. His duties will be handled by Justin Choi, senior vice president, general counsel and corporate secretary.
Corporate officer Jim LePorte, currently vice president of sales operations, will join Wireless Network Solutions as vice president of finance.
Not to be forgotten is CommScope Inc., the company whose acquisition offer was spurned by Andrew. CommScope said it is still focused on last-mile technology and is looking to buy companies that can help it expand its product line of last-mile solutions.
