General DataCom Industries Inc. disclosed a majorrestructuring last week, splitting the company into two divisions: Broadband Systems and Network Access. Each will have its own profit-and-loss responsibilities, and its own dedicated sales, marketing, and engineering staff.
GDC sells asynchronous transfer mode equipment to telecom carriers and network-access equipment to end-user organizations. Charles Johnson, chairman and CEO of General DataCom, says it was becoming difficult for sales and other personnel to know the company's two product lines well. "It's like having a sales force that sells airplanes and cars," he says.
GDC expects to incur a $2.5 million charge against first- quarter 1999 earnings, which the company will offset in fiscal 1999 through expense reductions resulting from streamlining business operations. GDC hopes the reorganization will cut $10 million a year--but more important, that it will bring in additional revenue with faster product development and sales cycles, and a more tightly focused employee base.