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Data-storage networking company will pare 12% of workforce despite gains in revenue and net income.
November 21, 2002
1 Min Read
Brocade Communications Systems Inc. reported a profit in its fiscal fourth quarter but said it plans to cut its 1,200-member workforce by 12%.
The data-storage networking company reported net income for the quarter ended Oct. 26 of $15.7 million, or 7 cents a share, compared with a loss $53.7 million, or 24 cents, in the year-ago quarter. Revenue rose 31%, to $153.1 million from $116.5 million. Brocade, which dominates the market for midrange switches that tie together storage networks, said the cuts and other cost-cutting measures will save more than $8 million in its first fiscal quarter. On Oct. 28, Brocade lowered its forecast for revenue and earnings, citing weak spending on IT. Brocade's share price ended the day at $7.28, up 89 cents. The company's stock price has fallen more than 75% this year. Brocade said this month that it would buy closely held Rhapsody Networks Inc. for about $175 million in stock, adding technology to ease the management of different kinds of computer-storage devices and networks. It was the company's first-ever acquisition.
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