Comverse Technology (Nasdaq: CMVT) fell US$1.25 to $68.86 in morning trading Monday, after the telecommunicationssoftware maker said it will cut 6 percent of its workforce.
Chairman and chief executive officer Kobi Alexander said that Comverse expanded its workforce last year because of booming growth. Now, “themacroeconomic environment has deteriorated” and cost cuts are necessary “tostay in alignment with (the) current level of growth.”
Alexander said the cuts will have “no adverse impact on customer-focusedactivities” like service and research.
“We will continue to investaggressively in all these areas, as well as areas that fuel sales growth andnew customer penetration,” he said.
Woodbury, New York-based Comverse said it expects to “meetor exceed” its financial targets for the first quarter ending Monday and the fiscal year as a whole, before charges associated with the layoffs.
The company is looking for first-quarter earnings of 42 cents per share onsales of $356 million, and full-year earnings before one-time charges of$1.78 per share on sales of $1.52 million.
Results for the year will includeup to $9 million in charges, which will be taken in the second quarter.
Alexander said that recent “customer wins,” including agreements to enableunified messaging for AT&T Wireless and Deutsche Telekom, provide examples ofComverse’s strength.
Comverse provides multimedia messaging and other personalcommunications services to more than 360 customers. Last month, the companyreported a 48 percent rise in fourth-quarter net income, to $76.87 million,or 41 cents per share, as sales rose 37 percent to $346.55 million.