Artisoft is slashing its global headcount by half, in anticipation of poor quarterly financial results. And the future of its Australian operation is in doubt.
According to officials from the networking solutions vendor, the losses incurred are directly attributable to the emergence of Windows NT into the low-end networking space.
In its dramatic restructuring bid, the company also announced it will close some of its international sales offices over the next few months.
David Hudson, managing director of Artisoft Australia, says he is unsure whether or not the Australian operations will be abandoned. The decision allegedly hangs on a statement of profitability, which must be presented to directors. However, Hudson is optimistic, because he claims the Australian arm of Artisoft has already addressed many of the actions being undertaken now by its US parent.
"In the past 18 months we have lowered the payroll, and refocused the company, so we're hopeful that the board of directors will react positively."
Hudson said that the company's woes began in 1996, when the introduction of Windows 95 began eating into the market share of its small business NOS, LANtastic.
Although the company was prepared to lose this market share, it hadn't figured on the penetration of Microsoft's NT server into the secondary marketplace for mid-sized companies.
"In terms of new network sales, we expected the NT Server to take around 10 to 15 per cent of the market, but in reality it took around 40 per cent."
Hudson said that, in addition to cutting operating expenses, the company had already refocused its efforts on new products such as iShare for PC modem sharing on the Internet, as well as protecting the channels that would still choose LANtastic over NT. These include vendors doing point-of-sale integration on DOS platforms, as well as the "out of the box" retail market.
According to Hudson, the company's survival strategy includes a continued focus on communications utilities, as well as protecting healthy LANtastic channels. The company has also recruited new board member Jerry Goldress, who specialises in corporate turn-around management, and performance improvement.