High-end modem manufacturer Dataplex has layed off nearly a quarter of its staff in response to an industry downturn and declining sales. General manager Roger Parrack confirms the company has reduced staff from around 100 to fewer than 80. "We've made some reductions in staff, certainly. I don't think we're Robinson Crusoe in that." He added that the problems experienced by Dataplex have been felt by others in the industry, such as Datacraft, Scitec and JNA.
It is believed factors such as increased competition, reduced margins, reduced spending among government departments and an overall slow-down at the high end of the IT industry have left Dataplex feeling the pinch.
"We've had a downturn in business. I believe that most of the companies in our industry are seeing a similar sort of thing. What we're doing is taking hard, difficult but responsible actions to ensure that if we're going to be operating at a lower level of business that we continue to operate profitably, and are around for the long term for our remaining staff and our customers.
"The way we see it there's a lot of general concern in the marketplace. People are being a bit careful about how they spend their money. Certainly government spending has slowed down - not just at the Federal level but also in most of the States, and we're battening down the hatches for the long term."
The first round of reductions occurred two months ago, with about a dozen people layed off. More recently a further nine people were made redundant. "I don't think it's easy for any company. We've done the best that we can for the people that we've let go. It's important that we maintain our position," Parrack said.
Dataplex also suffered problems as a result of the expiration of its $2 million research and development syndication late last year. This left its research division of over a dozen staff requiring funds from other areas of the company.