November 25, 2003
Yesterday Avanex Corp. (Nasdaq: AVNX) dropped a bit of a bombshell on employees at its Livingston, Scotland, plant: It told them the facility would be shut down unless a buyer could be found (see Avanex to Pull Out of Livingston).
Livingston is the former headquarters of Arrayed Waveguide Gratings (AWGs) manufacturer Kymata, which was acquired in 2001 by Alcatel Optronics (Nasdaq: ALAO; Paris: CGO.PA), which was in turn acquired by Avanex just four months ago (see Avanex to Buy Alcatel, Corning Units).
"One of the VPs for Avanex came to the Livingston site yesterday and announced that the company is reviewing worldwide operations, which could impact the Livingston site," Derek Milne, spokesperson for Avanex said earlier today. An employee consultation forum was established at the site, he adds -- this is a legal requirement in the U.K. if redundancies are expected.
The news appears to have come out of the blue -- although unconfirmed rumors suggest that Avanex bought Alcatel Optronics for strategic reasons and always intended to wind down the Livingston facility.
It looks as if Avanex is trying to shut down the operations as quickly as possible. Consider this: For 20 to 99 redundancies (layoffs for you folks in the U.S.), the employee consultation period is 30 days. For 100 or more redundancies, the period is 90 days. Immediately after closing the acquisition, Avanex reduced the number of jobs at the Livingston site from 162 down to just fewer than 100. By making the initial job reductions concurrent with the acquisition, Avanex reduced the necessary waiting period.
Dr. Richard Laming, former founder and CTO of Kymata, who was appointed VP of Avanex's Livingston site on September 29, declined to provide any comment.
One reason behind Avanex's decision may be that right now there is little sign of life in the market for passive optical components -- the specialty at Livingston, which housed Alcatel's Fiber Bragg Grating business as well as Kymata's AWG product line. Avanex appears to be retaining Alcatel Optronics' active components operations in Nozay, France.
In related news, Avanex's CFO Bruce Pollock has resigned without explanation. He is replaced by interim CFO Linda Reddick (see Avanex Appoints Two Execs)Avanex's U.S. spokespeople could not be reached before press time.
— Pauline Rigby, Senior Editor, Light Reading
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