Symbolics Lays Off 90 at Plant in Chatsworth
Symbolics Inc., a troubled manufacturer of computers used in artificial intelligence work, confirmed that it laid off 90 of about 260 employees last week at its Chatsworth plant.
The layoffs, which Symbolics called a “company downsizing,” came as the firm laid off 225 of its 640 workers nationwide in a move to stem losses and improve its chances of securing financing. Symbolics said the 225 layoffs will save $15 million a year.
The company, which once employed more than 1,000 people nationwide and now has slightly more than 400, has its headquarters in Cambridge, Mass., with most of its manufacturing operations in Chatsworth.
Once called “the IBM of artificial intelligence” by a trade magazine, Symbolics was one of the early leaders in making computers used in developing artificial-intelligence programs, which enable computers to emulate human reasoning.
But Symbolics, which had a reputation for making high-priced equipment, was hurt by competition from makers of less expensive computer work stations such as Sun Microsystems and Apollo Computer.
$4.9-Million Loss
In the third quarter that ended April 3, Symbolics lost $4.9 million, compared to a loss of $2 million a year earlier, while revenue dropped 29% to $17.4 million.
For the nine months, the company lost $24.8 million on revenue of $65.2 million. A year earlier, Symbolics lost $24 million on revenue of $74.6 million.
Symbolics said the layoffs will result in a charge against its earnings in its fourth quarter, ending June 30. The amount of the charge is believed to be about $5 million.
Besides cutting costs, Symbolics has recently taken such steps as introducing less expensive equipment and emphasizing the development of software and special parts for computers.
On another matter, Symbolics on Monday named high-technology investor Jay Wurts as its chairman and chief executive.
Wurts was a founder of Management Decision Systems, a Waltham, Mass.-based software developer that was bought for $47 million in 1985 by Information Resources of Chicago. Wurts most recently has been an investor in various new high-technology companies.
In an interview, Wurts said that he expects Symbolics to return to profitability “sometime in the next few quarters.”
In February, Russell Noftsker, Symbolics’ chief executive officer, and Brian E. Sear, the company’s president, resigned under pressure from the company’s board of directors. Company executives said the two had feuded over such issues as where to reduce expenses, causing what some executives called divisiveness within Symbolics.
