Tekelec plans to eliminate up to 15 percent of its workforce to offset slowing sales, a move that cost about 50 jobs in the Triangle.
The Morrisville technology company confirmed this morning it has begun a restructuring "designed to align its operating cost structure with its current and expected business opportunities."
That includes cutting its workforce 10 percent to 15 percent, with layoffs expected to happen in phases through the end of this year. Tekelec employs about 1,250 people worldwide. That now includes about 625 in the Triangle.
Officials completed notifying affected employees in Morrisville on Wednesday and "layoffs in Morrisville are substantially complete," Tekelec spokesman Adam Parken wrote in an email. Employees in Tekelec's other sites will be notified during the year.
The cuts come as Tekelec is struggling with weaker demand for its telecommunications products, which help transmit phone calls and text messages. Revenue for first quarter was $107.8 million, down 7 percent from a year earlier. Orders were up 22 percent during the quarter, suggesting that the company's shift to next-generation technology is gaining ground.
Tekelec also is looking to hire in areas of its business where it's seeing growth. The company has about 10 open jobs posted in Morrisville.
But the company also reported a first-quarter net loss of $16.0 million, or 23 cents per share. That compared to a profit of $13.7 million, or 20 cents per share, a year ago.
Wall Street investors have been calling for the company to reduce expenses and refocus its strategy.
Tekelec shares fell 30 cents this morning to $7.85. The stock has lost more than half its value in the past year.
The restructuring and layoffs are expected to cost the company $23 million to $28 million in severance and other expenses. But the move will reduce annual operating expenses by $20 million to $25 million, saving Tekelec money in the long term.
"We completed the first quarter of 2011 with solid results," Krish Prabhu, who took over as interim CEO in January, said in a prepared statement. "We also had to make some tough decisions during the quarter and initiated changes to improve the operating performance of the company by aligning our cost structure."
Staff Writer John Murawski broke the news of Tekelec's restructuring in this morning's News & Observer. Read that story here.