The company's latest dose of bad news comes just three weeks after Nasdaq halted trading of the company's shares after Clarent executives said it may have overstated revenue earlier this year.
The manufacturer of technology that lets people make calls over the Net said it laid off 350 employees, or about 50 percent of the staff. The Redwood City, Calif.-based company also cut revenue expectations for its third quarter by more than half. Clarent now expects third-quarter revenue to reach $17 million to $18 million, far below the previous predictions of $40 million to $43 million.
In addition, Jerry Chang on Thursday resigned as board chairman, two months after stepping down as the company's chief executive. Chang and two other top-level executives were placed on administrative leave earlier this month when the company discovered that revenue for the first two quarters of the 2001 fiscal year may have been overstated. The other two top-level executives, Matthew Chiang, president of Clarent's Asia-Pacific unit, and Kevin Chang, general manager of Clarent's Northern Asia operations, also left the company Thursday, according to Clarent.
Clarent Chief Marketing Officer Steven D'Alencon and Senior Vice President Peter Bohacek also resigned Thursday.
Clarent has been ravaged by the economic slowdown this year, resulting in ongoing corporate restructuring that has included layoffs and executive turnover. The company in May laid off 10 percent of its staff after posting a first-quarter loss of $2.1 million. In July the company laid off another 27 percent of its work force after announcing a second-quarter loss of $9.6 million.
Clarent executives have said the company may have to restate earnings for the first two quarters of fiscal 2001, following its internal investigation. The company's stock is currently halted at $5.37 and won't resume trading until Clarent executives send the Nasdaq additional information it has requested, a Nasdaq representative has said. The company's stock had reached a high of $178 in early 2000.
"The decision to reduce our work force was a difficult one," Clarent Chief Executive Mike Vargo said in a statement Thursday. "However, we recognize the importance of responding quickly...to changing market conditions in order to ensure that Clarent continues on the path to profitability."