Global Village to Lay Off Workers, Cut Costs

Global Village Communications has announced it will lay off 20% of its workforce and reduce operating expenses in hopes of returning to profitability.

Global Village Communications has announced it will lay off 20% of its workforce and reduce operating expenses in hopes of returning to profitability.

In addition to laying off 42 workers, the company also says it expects to take a restructuring charge of US$25 million to $30 million.

The California-based modem maker - which has primarily made modems for Macintosh computers - has seen its profits sink as Apple Computer struggles to regain market share in a Windows-dominated world.

Yesterday, the company's stock closed at $5.75, a 52-week low. A year ago, Global Village's stock hovered comfortably around $20 a share, but dropped sharply in May when the company forecast a $3.3 million loss for the first fiscal quarter of 1997.

A statement from the company says it predicts revenues for the third quarter of fiscal 1997 to be "significantly below expectations."

Most of the company's problems have stemmed from sluggish Macintosh sales (90% of its modems were made for Macs early last year) and the May recall of thousands of Macintosh Powerbooks which had Global Village modems installed, officials said.

Included in the new restructuring plan is a strategy to move more than half of its business over to the Windows platform while still continuing to market Macintosh products. In November, the company announced its first PC modem and has been selling Windows-based communications software for about six months.

Global Village can be reached on the World Wide Web at http://www.globalvillage.com/.

Join the newsletter!

Error: Please check your email address.
Show Comments

Market Place

[]