Tech News - Rainbow Technologies to Cut Workforce, Take Charges

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Rainbow Technologies to Cut Workforce, Take Charges

06/07/2002

IRVINE, Calif. (Reuters) - Software company Rainbow Technologies Inc. said on Friday it will cut about 8 percent of its work force and take charges totaling $29 million to discontinue its non-security related information technology services.

Rainbow, which sells software licensing and protection applications, identity authentication products and other network security products, said it was taking the actions in response to a steep drop in spending on IT services infrastructure.

The company said it would integrate the security services of its Rainbow Spectria segment into its eSecurity business in Irvine, and shut down the Spectria facility in Long Beach, California. About $15 million of the charges would result from the job cuts, while the rest of the charges would be related to discontinued products.

Rainbow also said it expects its second-quarter revenues will be about 5 percent below the prior quarter's results.

In addition to the charges, the company also said it will take a tax-related valuation allowance of about $12 million, which will be used to offset future taxable income.

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