ATX Networks, a top supplier of amps and nodes, has initiated a reorganization that largely impacts sales and marketing positions as the company looks to allocate more resources toward R&D.
Multiple industry sources said ATX’s reorg – announced internally last week – targeted a cost reduction in the range of 10% to 12%. But Tom McLaughlin, a cable industry vet who took the helm of ATX last summer, denied those estimates, telling Light Reading that the cuts, which included some cost optimizations and reduction in discretionary spending, were less than that.
McLaughlin said ATX has experienced “some headwinds” due to evolving US tariffs and trade policies, but stressed that the prime motivator of the reorganization is to boost investment in research and development (R&D) and operations.
Focus on R&D
The increased R&D and capacity efforts will largely focus on meeting commitments to operators that are embarking on multi-year 1.8GHz upgrades of their fiber/coax (HFC) networks along with a new optical product that will be announced next month at the FiberConnect show, McLaughlin said. ATX is also developing a new powering product that’s on track for an intro at this fall’s SCTE TechExpo in Washington, DC.
“What we did was take the opportunity to restructure the company and preserve our ability to deliver all of the R&D projects that we’ve already committed to the industry,” McLaughlin said. “We’ve got a lot of things we’ve committed to in the MSO space around 1.8GHz upgrades and DOCSIS 4.0. “
ATX did not say how many individuals were let go in the reorganization, but sources familiar with the move said the company’s marketing and sales teams took the brunt of the workforce reduction. Specific roles impacted included the company’s VP of sales for Canada, account managers for certain cable operators (including Comcast and Altice USA) and the general manager of ATX’s video business, sources said.
The Comcast account, which is more strategic to ATX given the operator’s focus on the Full Duplex (FDX) approach to DOCSIS 4.0 (ATX’s product focus is on the Extended Spectrum option of D4.0), will be distributed to others in the company. Meanwhile, all company sales and marketing is now led by Jess Zelaya, who has been appointed SVP of sales and marketing.
“It’s more about moving things around as opposed to creating a gap in what we’re doing,” McLaughlin said. “We’ve got a heavy lift. We’re scaling operations to build more products.”
Inconsistency reigns in cable tech world
Cable spending patterns are generally lumpy for suppliers, but that trend has been amplified as operators mull over their network upgrade plans and whether they go for DOCSIS 3.1+, DOCSIS 4.0 or bite the bullet and pivot to fiber-to-the-premises (FTTP). This inconsistency seeped into the Q1 results of certain cable tech vendors.
Harmonic and Vecima Systems, for example, said recently that some spending is being delayed. Some of those delays tie into updated planning around emerging products based on a new family of “unified” silicon for Broadcom for DOCSIS 4.0 modems, amps and gateways.
Meanwhile, other suppliers, including CommScope and Applied Optoelectronics (AOI), saw upticks in cable-related revenues in Q1. Notably, ATX is one of the node and amplifier suppliers tapped for Charter Communications’ HFC network upgrade initiative, but AOI has gained some 1.8GHz amplifier share there of late.
McLaughlin said ATX is not experiencing an inventory build-up at the moment, holding that the company needs to add capacity to handle rising demand for 1.8GHz tech.
“We’ve got as much demand as we can handle,” McLaughlin said. “We’re in the beginning of a three-to-seven year refresh cycle.”
Overall, US tariffs have brought a degree of uncertainty for suppliers. ATX is managing its way through shifting US trade policies.
McLaughlin said the bulk of the costs tied to ATX’s amplifier lineup is protected from US tariffs. But ATX’s current power product has some exposure to them, as does UCrypt, a QAM-to-IP gateway focused on the hospitality and commercial sector (EchoStar/Dish is one of the top customers for UCrypt).
Zelaya added that ATX is seeing “a renewed consistency on forecasting” to help the supplier plan ahead and source components.
ATX is privately held and counts KKR among its lead investors.
Prior to joining ATX, McLaughlin was president and CEO of Advanced Media Technologies (AMT) and before that was president of USTC. He has also held exec slots at CommScope, Arris, Motorola Broadband and General Instrument.
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