Bookham Nips and Tucks

Bookham plans to shed another 200 jobs in the UK because its homegrown products aren't selling well

February 6, 2003

3 Min Read
Bookham Nips and Tucks

Hidden away in the small print of this week's earnings report fromBookham Technology Plc (Nasdaq: BKHM; London: BHM) was news that the components maker may shed another 200 jobs, this time from its Milton facility in the U.K. (see Bookham Boosts Q4 Revenue).

Milton is where Bookham manufactures its ASOC products, the original technology on which Andrew Rickman founded the company in 1987. ASOC, which stands for active silicon integrated optical circuit, is a silicon-based platform for integrating both active and passive optical devices.

But ASOC sales have fallen, while products from Bookham's recent acquisitions of the components divisions of Marconi plc (Nasdaq/London: MONI), and Nortel Networks Corp. (NYSE/Toronto: NT) have already produced significant revenues for the company (see Bookham Gets a Bargain and Bookham Buys Nortel's Components Biz).Indeed, in the earnings call, Bookham noted that revenues had grown to £14.3 million (US$23 million) in the fourth quarter 2002, compared to £7.6 million ($12.4 million) in the third, an increase of 88 percent. The fourth quarter included seven weeks of revenue from the newly-acquired Nortel components business.

Of course, these acquisitions have come at a price -- both in terms of increased expenditure, and in terms of job losses. However, the Milton layoffs appear to be an additional measure, quite unconnected with the acquisitions.

In a prepared statement, Bookham said it had "decided to significantly downsize the manufacturing and R&D of its ASOC product line in order to... focus resources on product lines producing revenues in the short and medium term, and reduce the company's overall cash burn."

Currently, Bookham has 1,945 employees worldwide, according to its CEO, Giorgio Anania. Of these, 420 are employed at Milton (before any workforce reduction). Final figures for the layoffs are pending a 90-day consulation process, Anania says.

It's worth pointing out that the figure for Bookham's total number of employees is still fluid, because the company hasn't yet finished its acquisition-related restructuring activity. Likely totals are hard to pin down, as Bookham is reducing its headcount in some areas while beefing it up in others.

For example, Bookham originally planned to lay off 200 workers from its Paignton site in Devon, U.K., one of the former Nortel locations. In the end only 70 lost their jobs, according to Anania. "We found a way to keep them," he says, referring to the fact that the company decided to consolidate its assembly and test facilities in Paignton.

Anania also points out that Bookham is now hiring in Paignton, "obviously not for the same 70 positions, but for different ones." He also claims that the company is hiring at its Caswell site, home of the former Marconi group, as the wafer fabrication facility is ramped up.

A source in the U.K. summarizes Bookham's recent maneuvers: "Firstly, about a third of Nortel's packaging staff will have to go. Then the packaging staff from Caswell will have to relocate to Paignton, and the wafer fab staff from Ottawa will come to Caswell.""Funny, since when Nortel made big cuts last year, a large number went to work for then Marconi Optical Components at Caswell, only now to find that after selling their houses and moving [away from] Paignton they are about to return." Funny? Hilarious!

— Pauline Rigby, Senior Editor, Light Reading

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