Financially strapped networking software maker
announced Wednesday it would lay off 60 percent of its staff in what the company is calling a “corporate restructuring,” but that the layoffs will have no affect on the company’s appearance at
next week or the rollout of its enhanced voice, video and data software, TeraMedia version 2.5.
San Diego-based TeraGlobal said the reductions will affect mostly administrative positions, but will also include reductions in the marketing, development, quality assurance and engineering groups. The company currently has a staff of some 78 people.
“This restructuring brings our expenses more in line with anticipated near-term revenues,” said TeraGlobal President Paul Cox, in a press statement. “It reduces our requirements for external financing and focuses our resources on selling and supporting our TeraMedia 2.5 product and other network solutions.”
A company spokesperson told MacCentral Thursday the staff reduction will have no affect on the company’s plans to exhibit at Macworld Expo next week in San Francisco and that plans are still on track to debut version 2.5 of TeraMedia. The product is a software-based solution that offers high quality audio, low latency video and integrated data across any broadband network connection, including Ethernet.
TeraGlobal has been in financial turmoil throughout most of 2000, reflecting a decrease in service contracts. For the nine months ending last September, revenues fell 5 percent to US$262,000. Net loss increased 40 percent to $14.1 million. The higher losses reflect increased personnel and marketing expenses at TeraGlobal, which led to Wednesday’s layoffs.
In November the company declared its intention to aggressively seek strategic alliance opportunities in an effort to expand its business and work its way out of mounting debt.
TeraGlobal said in late December that it believed it had enough cash and expected revenues to continue operations through January. The company also said it was entering into talks to get debt or equity financing and was interviewing investment banks to help find capital sources and explore strategic options.
In addition, the company announced a revised business plan, including a three-tiered approach targeting the end user, service provider, and technology and infrastructure markets.
TeraGlobal is a publicly held company, which was founded in 1998. The company stock, has traded as high as $11.75 in mid-January of 2000, but is now trading at around 41 cents a share.