Emulex Says 90 Employees Laid Off to Help Cut Costs

Emulex Corp., a manufacturer of computer components, confirmed Thursday that it has laid off 90 employees in the past week in an effort to cut costs during the recession.

Emulex will take a charge against earnings of $4 million to $5 million for costs associated with the layoffs and other cost reduction measures in the company’s second fiscal quarter ending Dec. 31, the company said.

“We have a sluggish economy, particularly in the electronics business,” said Robert N. Stephens, chief executive. “We decided we had to reduce our operating expenses to give us greater flexibility.”

The company also reported it earned $604,000, or 6 cents a share, for the first quarter ended Sept. 30, compared with earnings of $1.2 million, or 14 cents a share, a year earlier. Revenues for the quarter were $35.1 million, up 3% from $34.1 million a year earlier.

The layoff is the second this year for Emulex. In May, the company shifted circuit-board manufacturing operations from Costa Mesa to its Puerto Rico manufacturing plant and dismissed 60 employees.

The earlier layoff resulted in a $563,000 charge against first-quarter earnings. Earnings were also hurt by a slowdown in the company’s network products and storage products divisions.

This time, the company laid off 60 people in Costa Mesa and 30 working in branch locations. Affected employees will receive severance pay based on years of service, said JoAnne Martz, Emulex spokeswoman.

Stephens said the cutbacks will bring the company’s work force to slightly less than 800 people.

The number includes about 25 new employees the company gained with its $3.5-million purchase last week of InterConnections Inc., a software company in Bellevue, Wash., that writes programs for networks of personal computers.

Stephens said the second-quarter writeoff would also include $2 million to $2.5 million in expenses related to the shutdown of obsolete product lines and some offices.