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Tech Industry

World of trouble for Global Village

Global Village will take a $25 to $30 million restructuring charge for the third quarter and cut 20 percent of its work force.

Global Village (GVIL), a modem maker and remote access developer, today said it will take a $25 to $30 million restructuring charge for the third quarter and cut 20 percent of its work force.

The company, which also produces fax-modem software and wireless Internet receivers, said the restructuring is designed to focus the company on its core business.

Global Village said it expects revenues to fall "significantly" below expectations and it will report an operating loss for the third quarter. A reserve has been established to deal with returned products from resellers and distributors.

Global Village also plans a write-down of its inventory and other assets to reflect expected sales in future quarters and its refocusing of core product lines.

In an effort to bring profitability back to the company, Global Village said it will lay off 42 employees as it streamlines various departments.

The company also plans to cut its marketing expenses and administration costs. "The goal of these changes is to return Global Village to profitability, while allowing us to focus on our core business of making easy-to-use personal communications products for both Macintosh and Windows users," said Neil Selvin, president and chief executive, in a statement.

Global Village, which has undergone a tumultuous year, reported a substantial drop in profits during the second quarter to $400,000 compared with $2.3 million a year ago. Revenues were virtually flat at $32.2 million compared with a year ago.

In its first quarter, though, the company suffered a $3.3 million loss, compared with profits of $1.6 million. Earnings were hurt by Apple's recall program for its Macintosh PowerBook 5300. Global Village is a supplier of PowerPort PC cards.