BigBand Networks Inc. (Nasdaq:BBND), a developer of digital video management software for broadband service providers, announced yesterday that it will lay off 9% of its workforce, in order to cut costs.
The layoffs and consolidation of some facilities will save $8 million a year. The company will report a one-time charge of $2 million for the measures in the first quarter of 2011.
BigBand added that it expects to post $26 million revenue for the fourth quarter of 2010, in line with its guidance of $25-28 million. The company also reaffirmed its guidance of a GAAP-based loss per share of $0.09 (a non-GAAP loss per share of $0.04), amounting to a net loss of $3.4 million.
BigBand will publish its fourth quarter financial report after the market closes on February 1.
The announcement, published after Wall Street closed yesterday, did not drag down the share price, for two reasons. First, the company will meet its quarterly guidance (although it won't beat it, which is bad news in its own right). Second, it seems that the share price is already on the floor, closing yesterday at $2.80, giving a market cap of $193 million.
BigBand has $152.3 million in cash and cash equivalents, so the capital market prices the company's business at just a few tens of millions of dollars. The share price has fallen 16.2% over the past 12 months.
This is not the first time in the past year that BigBand is reducing its work force to cut expenses. In May 2010, it announced layoffs, without stating their extent. The company had 476 employees at the end of May, indicating that 42 people will lose their jobs in the current round of layoffs. The company has 170 employees in Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011