Caught off-guard by a sharp reduction in orders, EIP Microwave Inc. has laid off about 30 of the 230 workers at its main business and manufacturing facility in San Jose.
The Newport Beach company also is predicting a decline in its 1985 earnings because of the sales slump. EIP Corporate Vice Chairman Mark K. Howlett said employees at the San Jose facility were notified Wednesday of the layoffs, which became effective immediately. EIP manufactures microwave test and measurement instruments used in the defense and telecommunications industries.
None of the small corporate staff at the company's Newport Beach headquarters was cut, said Howlett. But he said that cutbacks in San Jose were made in all departments except product research and development.
The staff reductions, he said, were designed to help the company maintain profitability at the lower sales levels anticipated for fiscal 1985.
Howlett said he had no explanation for the drop-off in orders that began in the second quarter of its 1985 fiscal year and escalated during the third quarter, which will end June 30. "The trend began some ways back," he said. "We thought it would get better, but it didn't."
He added that he would not have precise figures on the downturn in orders until the current quarter's end.
In EIP's second quarter, ended March 29, it earned $319,000, down only slightly from $322,000 for the same quarter of fiscal 1984. Sales were $5.3 million, up from $4.5 million for the same quarter a year ago.
EIP's fiscal 1985 results are expected to drop below the $1.8 million in earnings it posted in its 1984 fiscal year, ended Sept. 30. The 1984 earnings were 19% higher than those of fiscal 1983.