Adaptec Axes Headcount, Again

Adaptec Inc. (Nasdaq: ADPT) today announced it has slashed another 11 percent of its workforce, or 165 people. This is the second headcount reduction undertaken by Adaptec in a matter of months to try to lower its costs (see Adaptec Lays Off 11% of Workforce and Adaptec Cuts Back).

The storage component maker, which will have 1,385 employees after the layoffs, said it expects to take a one-time charge of approximately $7 million related to the actions.

The restructuring targets annualized savings of approximately $17 million. Adaptec says its revenue and earnings levels for its fiscal fourth quarter 2002, which ends in March, will remain generally comparable to its third-quarter results, as previously forecast. Adaptec reported net income in its third quarter of $3.0 million on sales of $109.0 million, up 27 percent from the previous quarter (see Adaptec Boosts Q3 Revenues).

"This restructuring will enable us to maintain our investment in new products and technologies while continuing to improve bottom-line results for stockholders," said David A. Young, Adaptec's chief financial officer, in a prepared statement.

Adaptec is one of the major suppliers of SCSI controllers and also sells a range of external RAID storage systems, but it's been banking on the iSCSI market for new revenue growth -- and that has failed to materialize as soon as it hoped (see Adaptec Sees iSCSI Delayed and iSCSI in Exile).