APC Lays Off 330 Employees

American Power Conversion said today that it will eliminate 330 jobs in a cost-cutting move.

American Power Conversion said today that it will eliminate 330 jobs in a cost-cutting move. APC previously announced plans to reduce 200 to 250 positions in Ireland, and said the combined cuts will save the company $32 million through next year.

The job cuts "do not mean we are decreasing our commitment to our data center and InfraStruXure initiatives or to our core uninterruptible power supply (UPS) business," explained Rob Johnson, APC's president and chief executive officer. "This is an extremely difficult decision to make, and one I do not take lightly. But given the company's recent financial performance, it is essential to ensure our continued competitiveness in the market."

APC's performance has been critiqued recently by a large shareholder, Matrix Asset Advisors Inc., which in a letter to the company dated September 11, urged the board to "critically self-assess the proper corporate structure and direction" for the company. "We believe that a change in ownership structure, either through a private equity sale or a sale to a strategic buyer, is the best way to reap the efforts of your franchise development," said Matrix in the letter, according to a Reuters summary.


On August 15, American Power said Rodger B. Dowdell, Jr. was retiring as President and CEO, effective immediately, and Johnson was named to succeed him. APC also said it will make $1.5 million in severance payments to Dowdell, as required by his severance and compensation agreement. The payout will be recorded in the third quarter.

For the second quarter 2006, revenue in American Power's UPS and cooling products for data centers increased 33 percent year-over-year to $139.5 million.

"We remain significantly committed to succeeding at the businesses we operate in and will make the appropriate investments required to accomplish this objective and better meet customer needs," said Johnson. "But we do believe by realigning resources ... our global teams will be more productive and have a better opportunity to drive profitable business expansion."

The layoffs come just days after APC announced it had placed third in the Information Week 500, and also been honored by CIO magazine for its customer service performance. Founded in 1981, American Power Conversion offers a wide variety of products for network-critical physical infrastructure including its InfraStruXure architecture for on-demand data centers. Headquartered in West Kingston, Rhode Island, APC reported sales of $2 billion for the year ended December 31, 2005.