UTStarcom Chief Executive Peter Blackmore said Thursday that the company will lay off 2,300 staffs, or 50 percent of the total workforce as a part of cost cutting.
Additionally, it will also outsource its manufacturing operations, taper down its focus on R&D and trim its facilities and administrative costs. Altogether, these efforts are expected to bring down the annual operating expenses by more than half to less than $100 million.
"Today''s announcement represents a significant change in our business model. Collectively, these initiatives are aimed at returning UTStarcom to profitability as quickly as possible," said Peter Blackmore. "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."
“Collectively, these initiatives are aimed at returning UTStarcom to profitability as quickly as possible,” said Blackmore.
Major part of the job cutting will take place in the in Q3 and be accomplished by the end of fourth quarter.
Company’s India MD, Vijay Yadav confirmed to TelecomTiger that India operations will remain largely unaffected by the move. “ We continue to report strong growth in the broadband and IPTV market in India. It means that the India operations will remain unaffected by the announced job cuts,” said the MD.
UTStarcom’s India headcount totals around 125-150. Though the employee strength might appear to be small, the company is consistently consolidating its position in the broadband market including IPTV infrastructure in India with regular contracts from state-run PSUs BSNL and MTNL.