UTStarcom (UTSI) warned of a steep sales slowdown in China and set plans to fire 1,400 workers.
The Alameda, Calif., wireless-equipment maker cited a projected drop in sales of its personal personal wireless access systems in China. The firings would reduce staffing by 17%.
In after-hours action Thursday, investors cut 21% off UTStarcom's shares.
The company says it expects restructuring and other charges to create a net loss of as much as 80 cents a share on sales of $740 million in the current quarter ending in June. Those projections come as Wall Street expects a 19-cent profit on $847 million in revenue.
For the first quarter ended in March, UTStarcom posted a 29-cents-a-share profit on $902 million in sales. Analysts were looking for a 14-cent profit on $803 million in sales.
"Alongside our continued efforts to diversify our product portfolio and increase our international presence, we are taking the necessary steps to realign the company to better meet the demands of our new market reality," CFO Mike Sophie said in a press release Thursday.
The company says the cuts will reduce quarterly operating expenses by $40 million by the fourth quarter of 2005. And cash required to fund the business will be reduced by $200 million due to the cuts and restructuring.
UTStarcom shares fell $2.24 to $8.20 in after-hours trading Thusday.