Local modem manufacturer announces new layoffs

Alicia Robinson

Conexant Systems Inc. announced layoffs Friday that will leave 300

workers -- including 120 in its Newport Beach offices -- jobless.

The semiconductor and computer-modem maker blamed the staff

reductions on continued effects of a merger and lower-than-expected

first-quarter revenues. The reductions follow the 200 job cuts -- 100

in Newport Beach -- the company announced in April. Conexant merged

with New Jersey-based Globespan Virata Inc. in February.

“We had lower-than-expected revenues the first quarter, and our

outlook for the September quarter is lower than we thought it would

be as a result,” Conexant spokeswoman Gwen Carlson said.

The company projected revenues between $308 million and $323

million for the third fiscal quarter -- which ended in June -- but

actual revenue only reached $267.6 million, a drop of 9% from the

previous quarter’s earnings, Carlson said.

Some of the job reductions are effective immediately, and the

balance will be completed by the end of the year, she said. Jobs will

be cut in the research and development, sales, general and

administrative departments.

Having a leaner workforce is expected to reduce Conexant’s

operating expenses from $110 million to $90 million a year.

Carlson said the company does not expect any further job

reductions in Newport Beach.

The Conexant layoffs aren’t a devastating blow to the city’s job

picture because they were anticipated and they’re an anomaly in

Newport Beach’s current business climate, said Richard Luehrs,

president of the Newport Beach Chamber of Commerce.

The company seems to be doing well overall and has communicated

long-term plans to hire as many as 2,000 workers in the research and

development area, he said.

“The technology industry has some very high ups and some very low

lows, and that’s the way the industry operates,” Luehrs said. “It’s

all part of a bigger plan and they knew they were going to have to do

some of this.”