Rainbow Discloses Layoffs, Posts Loss in 2nd Quarter

Internet security firm Rainbow Technologies Inc., facing lower orders from key customers, cut 65 jobs at its Irvine headquarters last week, about 20% of its North American work force, a spokesman said Wednesday.

The company disclosed the layoffs as it posted a second-quarter loss on lower revenue. Rainbow also said it expects to take restructuring charges of $18 million to $20 million in the third quarter.

The announcement came after the close of regular U.S. trading hours. The stock closed at $5.05, up 32 cents a share, on Nasdaq.

The layoffs were spread among the firm’s corporate staff and two business units--the Digital Rights Management Group and Ivea, which makes security programs for e-commerce companies.

Rainbow’s units in Torrance and Long Beach were not hit by job cuts, but layoffs are likely in the company’s European operations, spokesman Dan Chmielewski said.

The company has approximately 600 employees worldwide, including about 240 in Orange County.

The firm’s customers, including such large data server companies as Sun Microsystems Inc. and Nortel Networks Inc., have been stymied by the spending slowdown in communications technology.

Rainbow also said it lost $2.3 million, or 9 cents a share, for the second quarter, contrasted with net income of $5 million, or 18 cents a share, a year ago. Revenue fell 4% to $37.3 million.