Extreme Networks is to lose almost one in six of its workforce as it seeks to drive operational cost savings of $20m (£12.4m) in its 2012 fiscal year.
The restructuring initiative will see 110 staff – about 16 per cent of the firm's worldwide headcount – exit the company. The majority of the vendor's software engineering operations will also be consolidated into existing facilities in low-cost territories.
During the firm's fourth fiscal quarter, which closed on 3 July, Extreme incurred a $3.5m pre-tax charge related to the restructuring. The goal is to reduce operating costs by $20m in FY12 and ensure operational margins remain above 10 per cent.
The vendor's sales for Q4 FY11 are projected to be in the range of $88m to $90m, more than the previously announced guidance of $80m to $85m. Extreme's sales in the corresponding period last year were $85.5m. GAAP losses per share for Q4 FY11 are expected to be between $0.02 and $0.04.
Extreme chief executive Oscar Rodriguez said: "We are rebalancing employee levels in all organisations to drive down fixed costs, while continually working to lower variable operating costs to ensure market competitiveness.
"We expect these changes will allow us to drive a competitive stance by increasing R&D resources to advance product leadership and by driving more investment in field marketing and brand awareness, while allowing the company to attain consistent double-digit operating income."
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