Price cutting, elimination of business segments, employee reductions and compensation adjustments. As the dramatic sales slide continues, these are the newest tools in the management arsenal along the 101 Technology Corridor. Many companies, particularly in the telecommunications sector, are facing sales declines of 50 percent or more compared to last year and, with no end to the downward spiral in sight, managers are scrambling to bring costs in line with the new revenue levels. Such cost-cutting is standard operating procedure, but what’s different about these cutbacks is they are coming amid a wholesale rethinking of basic business models. Instead of asking, “Can we make these widgets with fewer people?” CEOs and CFOs are redefining the company’s core businesses and objectives and asking, “What do we need to get there?” For some, that means spending a nickel to save a dime. For others, it means abandoning marginal businesses or those the company can’t excel at in order to put limited resources where they will do the most good. “We are tightening our focus,” said Gwen Carlson, a spokeswoman for Conexant Systems Inc., which employs about 450 workers at its Newbury Park facility. “We have identified three areas that we are channeling our resources to.” Consider these developments: & #711; Conexant discontinued its CMOS manufacturing process in favor of more specialized semiconductor manufacturing technology that is not as widely available. The company also divested a manufacturing division that did not target the three business areas where it is placing its focus: mobile communications, Internet infrastructure and broadband access. & #711; Chatsworth-based semiconductor company Luminent Inc. beefed up its sales resources while moving much of its manufacturing offshore. & #711; NetZero Inc., founded on the idea of offering free Internet service, overhauled its business model entirely, switching its focus to a subscriber-paid service from an advertiser-supported one. & #711; Accelerated Networks Inc. is focusing on its core products, no longer designing customized features clients request without a signed purchase order in hand. To be sure, layoffs have also played a major role in most companies’ cost-cutting policies. NetZero, whose officials declined to be interviewed for this story, eliminated 26 percent of its workforce. Luminent laid off 600 workers in the second quarter. Conexant slashed its workforce by 450, a portion of those at its Newbury Park facility. But staff reductions can be a double-edged sword for tech companies. On the one hand, companies say, at least privately, that many workers were hired on at exorbitant salaries because of technical expertise that, it turns out, is not as important as business seasoning. “We had guys in here 28 years old making $100,000 with very little experience,” said one manager who did not want to speak on the record. “There may have been a shortage of guys who could design an HTLM page, but there wasn’t a shortage of guys who know how to meet a payroll.” At the same time, many of these firms live and die by their ability to provide the next new thing. Cutting back on that brain trust can lead to larger problems down the road. “The quickest and easiest way for a company to improve the bottom line is layoffs,” said Ed Pollock, a spokesman for Luminent. “But that’s probably the least desirable way. You may be able to trim some fat, but you almost always tend to cut into some muscle as well, so you cut into the capability of the company.” One way to keep the talent they are certain they’ll need when the economy turns around is to curtail compensation spending. “I think one of the things that companies are focusing on is the people,” said Robert J. Pearlman, partner and technology practice leader for Grant Thornton, an accounting and consulting firm. “I believe you’re going to see, for the rest of this year, raises and cash compensation slowing down. So, where maybe you saw raises in the 10 percent to 15 percent range, this year you might see 4 percent or 5 percent or less.” Still, for many tech companies the real culprits are inventories, which have ballooned in the sales slump, and the non-stop R & D; efforts, which, executives say, is now running well ahead of the demand. “We’ve got it, we’re ahead of the market,” said Joe Vogel, vice president for product management and technology at Accelerated. “We have limited resources and we have to focus those resources where the dollars are going to be on the sales side.” Before, Accelerated engineers would happily design extra bells and whistles for customers, only to find that orders did not follow. When new management took over earlier this year, the company returned to its core competencies. “We focused on essential product features and functionality rather than things that were on a customer’s wish list,” said Vogel. “We were able to define our products and we stopped being all things to all people.” Most companies have dropped prices to help reduce inventories that began to pile up when the large telecom firms stopped ordering. Some have also stepped up their sales efforts. Luminent, for example, has added sales rep organizations on both the West and East Coast. “There’s still business out there,” said Pollack. “But where it might have been easy to get the business, you have to work a little harder at it. We’ve made a change in the way we approach selling, and we’re seeing that to be successful. If you have more people knocking on doors, you’ll sell more.”