US tech firms cut jobs, adjust to downturn

NEW YORK: Software maker PurchasePro.com Inc., high-speed communications firm

Level 3 Communications Inc. and telecommunications equipment firm Applied

Innovation Inc. have announced job cuts on Monday, struggling to adjust costs

amid a persistent downturn.

PurchasePro.com's new chief executive Richard Clemmer said he was slashing

staff by half, to fewer than 300 people, in a bid to reach profitability. Level

3 said it would cut 1,400 jobs, or 24 per cent of its workforce citing delayed

purchases by customers. Applied Innovation said it was cutting its staff by 15

per cent as it forecast lower results for the second quarter.

Michael Cohen, co-manager of the Alpha Analytics Digital Future Fund, said

the companies were adjusting to a changing economic scenario. "They're

making the cost structure much more attractive to profitability, but it also

signals just how bad things are," Cohen said. "Now that we realize

just how bad things are, we're actually relieved that they're getting their

costs aligned to the new reality."

"This is one of the key elements associated with the transition,"

said Clemmer. "It's absolutely critical we align our resources with the

expectations from revenues." Level 3, based in Broomfield, Colorado, said

it would take a $100 million second quarter charge related to the restructuring.

Applied Innovation, which makes gear to monitor telecommunications equipment,

also saw its stock drop sharply. Its shares fell $5.50, or more than 41 per

cent, to $7.75, among the largest percentage losers on the Nasdaq. The company

said it expected the cuts to save $2.5 million a year.

(C) Reuters Limited 2001.