Aether to lay off 280 in 3 states

Local tech company also puts on hold its move to UMBC

October 02, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

Aether Systems Inc., a wireless communications company that has been viewed as a leader in the Baltimore area's attempt to build its technology business base, plans to lay off 280 people.

The job cuts this week will be spread among the company's headquarters in Owings Mills, a software division in McLean, Va., and a government products unit in Massachusetts, a company spokesman said yesterday.

The company laid off 250 people in the spring. It now employs about 800, a decline of about 40 percent from its peak of 1,300 employees in January.

An Aether spokesman said that less than 100 layoffs will occur at Owings Mills, where the company employs about 375 people at headquarters and an additional facility.

"We're reorganizing to address the market we're in right now," said Greg Abel, a company spokesman.

The company's plans to build a new headquarters at the University of Maryland, Baltimore County, alma mater of company founder and Chief Executive Officer David S. Oros, is also on hold indefinitely, Abel said.

"The timing isn't right to make a move like that," Abel said.

Oros graduated from UMBC in 1985 with a degree in mathematics. Last year, the company gave UMBC $510,000 toward development of a wireless curriculum and related research seminars.

Aether's stock closed down 25 cents to $6.02 yesterday on the Nasdaq stock market.

The price was at a 52-week high of $122.50 in November, but has sunk steadily since, to a low of $5.60 a share.

The company informed employees Friday of the layoffs and of its plans to consolidate three divisions that serve the health-care, financial services and business solutions markets.

Aether's software can be used to allow stock traders to receive financial information on portable devices and law-enforcement agencies to retrieve data from computers in their vehicles.

In a memo to investors yesterday, analyst Bo Fifer of Deutsche Banc Alex. Brown Inc. maintained a "strong buy" rating on Aether but noted:

"Company sitting on $650 [million] cash, and reducing cash burn to ensure survival until economy rights itself, but obvious implication of cuts is that top-line growth is under significant pressure. No confidence in this environment in our projections."

Aether expects the moves to save $20 million to $25 million a year. It is expected to take a $5 million one-time charge in its fourth-quarter results for the 2001 fiscal year.

In its most recent quarterly report in August, Aether announced a 15 percent increase in net operating loss, to $104 million from $90 million. Analysts at the time questioned whether the company was shaving costs quickly enough, given the earlier round of layoffs.

Oros said at the time that additional job cuts were not planned, but that "nothing ... is really off the table."

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