WESTFORD, MA-Zuken USA has confirmed that it has laid off approximately 40% of its U.S. sales and support staff. This comes several months after Zuken increased its North American staff in an effort to crack the U.S. PCB design software market
In a press statement released today, Zuken stated: "By cutting unnecessary management layers and its CR5000 sales department, Zuken can focus its efforts in three main areas, CADSTAR, VISULA and Advanced Packaging/CR5000. This will affect approximately 40% of Zuken USA's staff. Zuken will continue to market CR5000 licenses in the U.S., but only to existing customers and select corporate accounts. The company plans to build CR5000 presence through a service business, better focused on customer service and support."
Earlier today, an off-the-record source had contacted Printed Circuit Design staff with news that Sept. 28, 2001, was the last day for approximately 20 Zuken USA employees, including General Sales Manager Paul Ewing, National Board Integrity Sales Manager Bob Gillette, and Board Integrity Business Development Manager Todd Himmel. The source also said that PCB design software would no longer be Zuken USA's main focus.
"Zuken's intent is to pull itself out of the U.S. market," said the source, who is a former Zuken insider. "They will continue to support CADSTAR and VISULA, but that's about it. HR is gone, but there's still IT." The source added that the layoffs affected about 20 people, leaving about 15 U.S. employees.
Another industry source confirmed that several Zuken USA employees are now looking for new jobs. Many of them were hired during a hiring ramp-up this spring. According to the Zuken insider, the company has now laid off "all the new hires, with the exception of a couple that were in key spots-some of the people supporting multiple tools, and people supporting CADSTAR and VISULA."
Zuken is positioning this staff reduction as the first part of the company's long-term strategy to create three new focused business units. The company plans to pursue only selected sales of its CR5000 product. As a result, Zuken has deactivated obsolete departments and trimmed its workforce. However, Zuken USA says that it has no plans to pull out of the U.S. PCB market altogether.
"Zuken has implemented a new business model created to put power back in the field and focus on customer service and satisfaction, and it reflects our goal to become a consulting and total solution provider for the electronics design manufacturing industry," stated Kash Maki, president of Zuken USA. "With our newly formed joint ventures, Zuken will look to establish leadership in high-density interconnect solution sales, with CR5000 as the basis for this offering. The CADSTAR, VISULA and AP units have remained relatively unchanged, and so has Zuken's commitment to the U.S. market."
Industry watchers and analysts are not totally surprised by the staff reductions.
"We've known their business was tanking for some time," said Daya Nadamuni, EDA analyst at Gartner Dataquest. "In North America, they were in startup mode, and I guess they didn't get very far. As far as I can tell, this was their fourth attempt to get into the North American market." All of Zuken's announced North American wins, she said, were in the packaging area.
Worldwide, Nadamuni said, Zuken was the number three PCB CAD vendor in 2000, with $71.9 million in revenue and a 16.9% market share. But the vast majority of those revenues came from Japan. In North America, she said, Zuken's revenues were down 50% in 2000 to $3 million, a paltry 1.5% market share. Similarly, Nadamuni said, Zuken's European revenues were down 46% in 2000, where the company held an 8.6% market share. These Dataquest figures include both layout tools and packaging.
Only because of Zuken's strength in Japan did the company post a modest 1.2% growth in PCB CAD revenue in 2000. Zuken held a 50% market share in Japan last year, and realized 16.4% growth. The worldwide PCB CAD market grew 17.5% from 1999 to 2000.
EE Times and other CMP Media staff contributed to this article.