Blasting at Copper Mountain

Copper Mountain Networks Inc. is laying off 45 of 175 workers in an effort to cut US$3.5 million to $4.5 million in costs per year, while intensifying efforts to sell its latest carrier DSL gear to major service providers.

The layoffs will initially cost the company $1.4 million in severance packages.

The company says it wants to focus on selling its newly available VantEdge broadband concentrator to major carriers and, despite the layoffs, will be hiring members of sales teams that are dedicated to individual potential carrier customers.

Copper Mountain says it has 11 carriers lined up for trials, three of them already testing VantEdge gear in their labs. One of those is a U.S. local carrier, and the other two are European, the company says.

In a report on Copper Mountain, Current Analysis Inc. says the company would benefit from teaming up with a major telecom equipment seller that lacks DSL aggregation gear, such as Cisco Systems Inc. It had such a relationship with Marconi but that fizzled as Marconi faced its own financial problems, the report says.

Despite Copper Mountain's early entry into the DSL field, it has only 1 percent of the market, according to Current Analysis.

Last year the company laid off 40 percent of its workforce and shifted to indirect sales and support for its CopperEdge gear. It also closed a Fremont, Calif., facility.

Carrier equipment giants Alcatel SA, Lucent Technologies Inc., Siemens AG all compete with Copper Mountain, but have two distinct advantages: they sell other types of telecom gear to complement their DSL equipment; and they already have major carriers as customers.

Since last year, Copper Mountain's revenue has dropped from $8.2 million per quarter to $3 million. During that time it has consistently logged quarterly deficits ranging from $10.7 million down to $5.9 million. The company's stock price has dropped from $3.39 last year to 69 cents.

Copper Mountain also announced that its senior vice president of engineering, Steven Hunt, will retire and be replaced by Chris Shaver.

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