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Paging firm to cut 55 percent of jobs

Glenayre Technologies--sued last week by BlackBerry pager maker Research In Motion--plans to cut 700 jobs over the next six months.

Paging company Glenayre Technologies--sued last week by Research In Motion for alleged patent infringement--said on Wednesday it is getting out of the wireless messaging business and will lay off more than half of its staff.

The Charlotte, N.C.-based company said it will instead focus on its business that provides access to e-mail and voice mail over the Internet and cell phones. The company is cutting 700 workers, or 55 percent of its staff.

In a statement sent to CNET, Glenarye Vice President Joellyn Sargent said the company had announced in March its plans to restructure.

"The Glenarye restructuring is in no way related to last week's complaint filed by RIM," Sargent said. "Our attorneys are now preparing an appropriate response to the complaint. We do not intend to try this case in the media, so we have no further comments at this time."

Last week, RIM filed suit against Glenayre for allegedly infringing a patent covering RIM's method of redirecting corporate e-mail to a handheld device. In an interview last week, RIM co-CEO Jim Balsillie called Glenayre a "blatant imitator" of RIM.

"This amateur hour has to stop," Balsillie told CNET "We see them as degraders, not creators."

In a statement, Glenayre said the restructuring was prompted by a continuing drop in sales from its paging business, which saw sales fall 27 percent last year and is expected to drop 70 percent this year. Glenayre said it is dramatically cutting the business now, with plans to completely exit the paging business within 12 months.

"The wireless messaging market has been extremely challenging, with Glenayre's infrastructure revenue expected to total only about $20 million in 2001," Eric Doggett, Glenayre's chief executive officer, said in the statement. "This decline is much more rapid and deeper than any of our previous expectations and significantly impacts our ability to fund our two-way device growth strategy."

Glenayre also said that several executives are leaving the company and that remaining executives and directors will take a 10 percent pay cut for the rest of 2001. Among those leaving are the company's chief financial officer and chief marketing officer.

The company expects to take a charge of $200 million to $250 million related to severance payments, the write-down of certain assets, and the loss it expects from its now discontinued wireless messaging segment.

Glenayre's sales rose from $15.5 million in 1992 to $321 million in 1995.

The company sold equipment to nearly all the big paging companies and expanded rapidly to Latin America and Asia. Then business slowed as mobile phone use climbed and price wars erupted in the paging industry.

The Associated Press contributed to this report.