Adtech plans more layoffs
By John Duchemin
Advertiser Staff Writer
Honolulu telecom test equipment maker Adtech plans to move its manufacturing operations to California and may lay off as many as 60 employees, more than 20 percent of its work force.
The move, part of a cost-cutting campaign by struggling British parent company Spirent, will be completed by February, Adtech officials said yesterday. Adtech's communications network test equipment will be made at a new Spirent facility in Calabasas, Calif.
The move indicates a change of direction for Adtech, which for several years has created and assembled communications network test equipment as an autonomous subsidiary of Spirent. Adtech had become a role model for Hawai'i's technology community, demonstrating that a company could profitably invent, make and sell high-tech equipment in the Islands.
After a summer of turmoil within Spirent, Adtech is being recast as a research and engineering division, with other functions being handled primarily on the Mainland where Spirent has several other subsidiaries.
"Our core competencies revolve more around engineering, developing new products and marketing, and we thought we could get some economies of scale by consolidating our manufacturing (with other divisions of Spirent)," Adtech president Alan Sguigna said.
The move comes despite Sguigna's reassurances in July that the company would not transfer jobs from Hawai'i to the Mainland. Sguigna said yesterday that the economy has worsened since his earlier statement, and that product orders virtually ceased in the days following the Sept. 11 attacks.
"What we did was the most sound business decision under the circumstances," he said.
Some employees will be offered jobs in a new-product development team, spokeswoman Cathi Lane said. Others will be offered jobs at the new site in California. The rest will lose their jobs. Lane said the company doesn't yet know how many might be laid off.
A 34-year-old local company, Adtech helped develop the network-testing field, and has carved a niche as one of the world leaders in the highly specialized market. Clients have included Cisco Systems, Nortel, Sprint and Lucent.
The company had been one of the fastest-growing technology companies in Hawai'i and one of the most profitable divisions of Spirent, which bought Adtech in 1997.
Last year, Adtech had 330 employees and $150 million in revenue.
In the past, Adtech officials have said Hawai'i worked fine as an assembly site for its equipment. Shipping costs were not an issue because the company's customer's were willing to pay the price for Adtech's high-end systems.
But Adtech officials say sales have slowed this year as its customers have lost billions of dollars and laid off tens of thousands of employees.
This slowdown in business forced the company to lay off 30 people in July, about 10 percent of its work force. It now has about 290 employees.
Spirent also has lost hundreds of millions of dollars this year as the telecommunications industry faltered.
Spirent reported a net loss of $380 million in the first half of 2001, and in August announced plans to lay off 7 percent of its work force and other cost-cutting measures.
