Weltsch said margins have dropped dramatically in the industry because of the proliferation of off-the-shelf PC technologies. E&S, he said, had to make the switch to PC components and otherwise lower costs in order to hold its own against competitors — including in-house operations at its biggest customers.

"That's where a lot of the restructuring and layoffs came from," he said. "The costs of their (competitors') solutions were coming down so dramatically, E&S had to match it. They couldn't win contracts by competing against others with similar solutions if their product was many times the cost of the others."

Fallout

But that transition has come at a cost as hundreds of workers lost their jobs. The latest round was announced in September, leaving the company with nearly 400 workers — down from more than 1,000 at peak levels.

Oyler believes the company is "now sized for the marketplace" and that the company has handled well its component transition and the declining markets. Analysts agree.

"We have been around a long time, and we have been very successful innovating and staying current over many, many years, such as very few companies have. The last couple of years, starting from '98, when you combine the product issues with then the whole technology market and the airlines and other factors, it's probably been the four or five hardest years in our history," Oyler said.

"Nevertheless, we have worked through that. Our new products are gaining market share, and we'll return to profitability in the fourth quarter, and we did what we had to do."

Not everyone agrees. Internet chat rooms are laden with criticism about the company's missteps and perceived missteps, much of it from former employees who squarely blame Oyler. His response? "You're always going to have some people who disagree.

"You always feel personally when you make a reduction. But at the same time, you do the best you can with assessing where the business is going, what the strategy is going to be and what the technology needs to be. Anybody in the technology industry who claims they're perfect is blowing hot air. There's no way to always be right. It's too hard, and it changes too fast and the environment changes so quickly. Even great companies go through difficult periods," Oyler said.

He notes that International Business Machines Corp.'s struggles 10 years ago made that company a target for critics, but IBM has rebounded. "And I think we have a lot of new things we've started during this period that haven't had a chance to pay off," he said.

Expected upturn

Along the way, E&S has worked to shorten its development cycle to meet the needs of ever-changing markets and changed the way it contracts with larger customers to better protect its interests.