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Ericsson Retools Strategies in San Diego

Ericsson Retools Strategies in San Diego

Cybertel Communications Enters Into Deal With Irvine’s Universal Broadband

CYBERBUCKS

Mike Allen, Senior Staff Writer

The global trend in cutting excess telecom jobs hit San Diego last week when Ericsson, the Swedish telecom conglomerate, said it will slash 200 current positions by mid-October at its CDMA infrastructure unit in Sorrento Mesa.

That would reduce the company’s local work force to about 800 people. As part of the restructuring, Ericsson is consolidating its facilities, moving out of a smaller building on Lusk Boulevard into its main building across the street.

The recent job cuts are a result of an earlier decision by Ericsson to reduce its global staff by about 40,000 people by the end of 2003. It had about 100,000 workers worldwide last year.

“Ericsson is committed to CDMA and to San Diego, but the market has been difficult and has changed,” said an Ericsson spokeswoman. “We are making adjustments to remain competitive.”

Ericsson has been adjusting since last year, and practically eliminated all of the manufacturing that it obtained when it purchased Qualcomm’s infrastructure unit in 1999.

Right now, the bulk of its staff is engaged in marketing, sales, research and development, administrative and distribution.

Last year, Ericsson moved a good deal of its manufacturing of base stations and other wireless equipment to other parts of North America, Europe and Asia.

The telecom meltdown has forced the world’s largest firms, including Alcatel, Nortel Networks, AT & T;, and Lucent Technologies, to inflict huge cuts to their payrolls in order to reduce expenses and survive.

From January through June, telecom companies in the United States have cut 165,840 jobs, according to Challenger, Gray and Christmas, a Chicago based-outplacement service firm.

That figure translated to one in every four jobs cut in the nation for the first six months of the year, according to the report.

Tyler Orion, president of the San Diego Regional Technology Alliance, a high-tech trade association, said the global telecom industry is suffering from a run-up in customer demand for cell phones and Internet access that never materialized as expected.

“They built out infrastructure way ahead of demand, anticipating this enormous demand. Unless new demand shows up, there’s nothing to build,” Orion said.

Compounding a lack of increased customer demand is a backlash from the public markets that have punished most every firm operating in the sector, making it tough to raise new capital. The main solution has been to reduce expenses by cutting people.

The biggest question is when will all the job-slashing stop.

“I don’t think anybody knows,” Orion said. “I think a lot of people thought it would be over by now.”

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Cybertel Strikes Deal: Cybertel Communications, a San Diego-based provider of telephone services, said it entered into a partnership agreement with Irvine-based Universal Broadband Communications in a deal that will reduce its costs by 40 percent.

Cybertel, which has been in business for about six years, offers competitive long distance rates to residential and business customers through 1-800 numbers and calling cards. It also offers Internet dial-up access.

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Previo Now Previous: Previo Inc. officially dissolved in a move that has been in the works for months. Its shareholders approved the sale of the company’s technology and most of its assets to Utah-based software maker Altiris for the nice, round sum of $1 million.

Once the asset transfer is completed, Previo will file a certificate of dissolution with the office of the Secretary of State of Delaware, where Previo was incorporated.

In filings last month, Previo said the dissolution would yield between $2.38 and $2.64 per share after expenses are paid. Previo will be delisted once the firm is dissolved.

Previo was formerly called Stac Software and was founded in 1983. It once flourished as a maker of disk compression software. In 1993, it won a patent infringement case against Microsoft that resulted in an award of $120 million.

When technology advances in PCs rendered Stac’s technology superfluous, the company changed its business to providing computer support services. The business never took hold, and as the losses piled up and a buyer couldn’t be found, its board decided the best option was to dissolve.

– – –

New Customer: Mitek Systems Inc., a local maker of software used by the banking industry for automated check processing, picked up First Security Bank in Bozeman, Mont., as a new client. The $300 million asset bank said it will use Mitek’s system for electronically capture data from checks, and process and archive other banking documents.

Send any high-tech finance news to

mallen@sdbj.com

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