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Reptron, Ariba cut hundreds of staff

The tech slowdown hits the bay area again as Ariba fires 160 workers, and Reptron more than 100, in Tampa.

By SCOTT BARANCIK

© St. Petersburg Times, published April 6, 2001


TAMPA -- The slowdown in technology spending, a symptom of the economy's overall sluggishness, claimed its latest Tampa Bay area victims Thursday.

Ariba Inc., a California company that helps create business-to-business marketplaces on the Internet, fired 160 of the 190 employees at its Tampa office. The firings were part of a previously announced downsizing that eliminated about one-third of the company's 2,100 positions nationwide and helped drive down the stock market Monday.

Separately, Reptron Electronics Inc. fired more than 100 of the 600 workers at its Tampa manufacturing plant, most of them assembly-line workers. The firings came less than a month after the company dismissed 20 of 200 workers in its local parts-distribution division. Some of Reptron's out-of-state operations also suffered cuts, though smaller.

"It's sort of an irony," Reptron chief financial officer Michael Branca said. "As a manufacturer a year or 18 months ago, your biggest challenge was finding enough capacity and people."

New employment statistics suggest the market forces plaguing such companies are having a broad effect on the economy.

U.S. businesses announced plans to eliminate 162,867 jobs last month, according to Challenger, Gray & Christmas of Chicago. That's a 60 percent increase from February and the highest total since the job-placement company began tallying corporate announcements in 1993.

Meanwhile, the number of U.S. workers filing new claims for state unemployment benefits rose to 383,000 last week, the highest level since July 1998.

Job cuts have come at companies both high-tech and low. There are plenty of examples.

Jabil Circuit Inc. of St. Petersburg, which makes components for computers and other consumer electronics products, cut an unspecified number of jobs last month. Solectron Corp., of Milpitas, Calif., a key Jabil competitor, cut 8,200 jobs last month and said this week it would fire 1,075 more workers.

Procter & Gamble Co., the maker of Bounty paper towels and other consumer staples, recently said it would cut 9,600 more jobs.

Ariba's Tampa operations were once the property of a home-grown company called Tradex Technologies Inc. In November 1999, Tradex moved its headquarters from Tampa to Atlanta, which its owners viewed as a high-tech boom city. A month later, it was acquired by Ariba for nearly $2-billion.

But Ariba's fortunes -- and stock price -- have fallen significantly since then. In addition to the firings, Ariba canceled its planned merger with Agile Software Corp. and said its results for the quarter ended March 31 would fall well short of expectations. The Mountain View, Calif., company expects to lose 20 cents per share for the quarter, excluding some non-cash charges.

For Reptron, the quarter ended March 31 was painfully slow. Though the company will not release official figures until April 25, Branca said sales reached just $132-million to $134-million in the first quarter, down from $160-million in the fourth quarter.

He blamed two trends for Thursday's firings: ebbing demand for the printed circuit boards used to build everything from ATMs to X-ray machines and reduced need for hand-assembled components, as opposed to those assembled by machine.

"Frankly, I don't know where this economy's heading," Branca said. "I'm not ready to declare that the economy's at bottom, so to that end, we remain cautious about the coming quarters."

Bonnie Walton, a 55-year-old solderer from Holiday who was among those fired Thursday, said Reptron's plant was operating with about half its workers on some recent days.

"We knew something was going on," she said. "We have no work, so what they were doing was, they were telling a lot of people to go home, stay a day or two."

Walton said she was sent home Thursday morning and will be paid only for Thursday and today, plus a week of vacation. Her company-provided health insurance will end this month.

Line supervisor Jeff Pancrazio, who also was fired Thursday, had a different explanation for Reptron's problems: poor management and a shortage of parts.

"I could throw a rock at the distribution center that was located right behind my desk, and it still took several days to get a part from over there," he said.

Ariba's stock price rose 53 cents, or 11 percent, Thursday to close at $5.34. Its stock has closed as high as $168.75 during the past year but hit an all-time low of $4.44 Tuesday.

Reptron's stock rose 31 cents, or 6 percent, Thursday to $5.75. Its closing price of $5.44 Wednesday was the lowest since January 1999.

- Information from Bloomberg News was used in this report. Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

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