95 Workers Laid Off : Micom Closes Chatsworth Plant
Micom Systems Inc. on Monday announced its second round of layoffs in the last two months, saying it had dismissed 95 workers and shut down manufacturing operations at its Chatsworth assembly plant.
The company said the workers were laid off Friday at both its Chatsworth and Northridge plants, and that manufacturing operations in Chatsworth would be moved to the Northridge facility.
Last month, Micom, a manufacturer of computer communications equipment, laid off 80 workers, including 50 people its Simi Valley headquarters and in Northridge. Micom has about 2,000 employees at its facilities in California, Massachusetts, Puerto Rico and in England.
Reorganization Plan
William A. Norred, the company president, said the layoffs and manufacturing consolidation were part of a reorganization planned for months. He declined to say whether there would be further layoffs.
Norred blamed the cutbacks on a sluggish market for computer products.
Micom stock, which is traded over-the-counter, closed unchanged Monday at $15 on a volume of 60,000 shares.
“The company’s been predicting flat sales or worse for this quarter and that hasn’t changed,” said Louis M. Brizzolara, an analyst for the Rowe & Pitman brokerage firm in San Francisco. “The market had nothing new to react to.”
Micom reported sales of $193 million, up 39% for its fiscal year ended March 31. Profits for the period increased by 23%. Sales for the fourth quarter were $52 million, up 15% over the same period last year.
Acquisition Praised
But fourth-quarter profits were off from the previous year, in part, analysts said, because of the acquisition of Interlan Inc., a manufacturer of computer communications systems different from Micom’s. Interlan had annual sales of $18 million before it was acquired.
Analysts said Interlan is a strong new part of Micom, and blamed a slow market for the layoffs. “In the long run, Interlan should help,” said Jay Stamag, who watches Micom for Duff & Phelps, a Chicago brokerage.
The outlook for Micom, Stamag said, would depend on how the rest of the computer market does. “A lot of companies we cover are having much more serious problems,” he said.
An analyst for L. F. Rothschild in San Francisco, Karen Mulvany, said the layoffs were an “industry-wide phenomenon,” and that Micom had no particular management or marketing problems of its own.
The Chatsworth building will be used for sales operations and for storage, Norred said. With the consolidation, all manufacturing operations will be done in Northridge. The product lines will not be changed, Norred said.
Founded 12 years ago as a custom data products company, Micom began mass marketing its merchandise in 1977.
Micom manufactures data concentration products, permitting many computer terminals to be hooked to a single leased telephone line. The company also makes equipment that enables personal computers to communicate with mainframe computers.
