Newbridge Networks Corp. said Wednesday it will fire 280 people, mostly at a troubled U.S. distribution unit, to save money as it tries to survive in the market for computer-networking equipment used by corporations.
The company dismissed 250 of the 600 employees at UB Networks, which was the cornerstone of its effort to increase sales to companies other than its main telephone-company customers. Most of the UB job cuts were administrative or marketing posts in California. The rest of the job cuts were U.S. and Canadian employees of the parent company.
Newbridge acquired UB last year for $96 million to grab a larger slice of the networking-equipment market. Newbridge on Wednesday ruled out selling UB, after saying last month that it might do so.
“The job cuts, while unfortunate, are necessary and a positive sign,” said Rob MacLellan, an analyst with SBC Warburg Dillon Read Inc. “It will definitely aid in any divestiture or writedown plans, and it will help operations by cutting overhead expenses.”
Shares of Ottawa-based Newbridge on the New York Stock Exchange fell $1.94, to $43.12. Newbridge shares have tumbled 25 percent in the last month, after it warned that its fiscal second-quarter profit would be lower than expected because of difficulties at UB.
Newbridge makes equipment that lets phone companies and corporations move large amounts of data over computer networks at high speeds.
