UTStarcom cuts 2,000 jobs

Telecoms equipment vendor UTStarcom has announced plans to cut approximately 2,000 jobs in a bid to return to profitability. The company said it plans to outsource manufacturing operations and optimize its R&D spending by focusing on selected products.

It said it expects the cost-reduction initiatives to bring its annualized operating expenses below $100m. It also expects to incur a restructuring charge of approximately $40m to $45m in its second quarter of 2009. The cash impact related to these charges is expected to occur in the third and fourth quarters of 2009.

Peter Blackmore, chief executive and president at UTStarcom, said: "These initiatives are aimed at returning UTStarcom to profitability. However, it does not fundamentally change our strategy which continues to focus on IP-based products in our major markets of China and India. We remain committed to maintaining our essential R&D and sales capabilities to help us achieve growth in our IP-based infrastructure products."

In May the company reported a net loss of $67.43m for the first quarter 2009, compared to net income of $24.84m in the year-ago quarter, on revenue down 80% at $119.34m.

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