Cipher Data Lays Off About 90 Employees

Feeling the pinch of a sluggish computer industry, Cipher Data Products on Thursday said it has laid off more than 90 employees, or about 5% of its work force, and has asked its remaining workers to take at least one week of vacation before the end of June.

The layoffs follow a management shake-up earlier this month at the Scripps Ranch-based magnetic tape peripherals manufacturer, during which the president and chief operating officer as well as the vice presidents of human resources and of product planning all resigned.

The layoffs reduce Cipher Data’s work force to about 1,740, which is still 30% more than one year ago, according to Don M. Muller, Cipher Data’s chairman, president, chief executive and chief operating officer. Hit hardest were support staff such as planners, schedulers and secretaries, he said.

The forced vacations will significantly decrease Cipher Data’s accrued-vacation expense, which Muller estimated at more than $1 million.

Most of the workers have accumulated paid vacation time, he added, but those who haven’t will be asked to take unpaid leaves. During the vacation period, Cipher Data will complete its regularly scheduled physical inventories, he said.

Although Cipher Data last week reported hefty increases in earnings and revenue for the third quarter ended March 31, it was the first time in 18 consecutive quarters that earnings and revenue did not improve from the previous quarter. Earnings rose 29% to $4.3 million, while revenue increased 35% to $44.4 million.