Siemens Weighs Optisphere Options

Siemens is scaling back -- and the IPO of Optisphere, it's DWDM equipment subsidiary, is on ice. What next?

August 6, 2001

2 Min Read
Siemens Weighs Optisphere Options

The fate of Siemens AG's (NYSE: SI; Frankfurt: SIE) U.S. subsidiary, Optisphere Networks Inc., hangs in the balance, as the German-based company continues to restructure its businesses and slog towards profitability. Optisphere makes optical crossconnects and DWDM equipment for metropolitan and long-haul networks (see Optisphere™ Networks, Inc.).

Optisphere is part of Siemens' Information and Communications Network (ICN) unit. ICN is one of three parts of Siemens' Information and Communications business segment.

On Friday, Financial Times Deutschland reported that Siemens was planning to make 5,000 additional job cuts from the ICN business. Specifically, the paper said that ICN might lose up to 20 percent more of its staff worldwide -- or about 5,000 people -- on top of the 5,500 that have already been let go from the unit this year.

The final decision, the paper said, rests on ICN President Thomas Ganswindt’s shoulders. Ganswindt is set to succeed Roland Koch as Siemens’ ICN boss in about three weeks, Siemens told Light Reading (see Nortel to Grab Koch?).

“Overall, we are not commenting [on the Financial Times article],” says Andreas Fischer, a spokesman for the ICN unit. “But we can say that the [layoff] numbers given in the article are pure speculation.”

Fischer says that in addition to the 5,500 jobs cut earlier this year from ICN, there are to be about 2,000 additional jobs transferred to Siemens’ Information and Communication Mobile (ICM) unit, which is also within the Information and Communications business segment. Siemens has cut 10,100 jobs across all its businesses this year (see Grim Reaping: A Downturn Tally).

Most of the jobs cut so far have come out of the ICN businesses focused on enterprise customers. Its optical business, for the most part, hasn’t yet been touched, but Optisphere layoffs haven’t been ruled out.

In July, Siemens CEO Heinrich Pierer said that his company had started taking “decisive restructuring measures in view of the weakening economy, particularly in the areas of Information and Communications.”

“There is an ongoing assessment of all Siemens businesses -- their prospects, their profitability, and their options -- and, of course, that affects the optical business as well,” says Fischer. “The optical business is part of ICN and will be assessed in due course.”

As of last year, Siemens' ICN unit had about 7,000 employees in the U.S. and booked nearly $2 billion in sales.

Officials at Optisphere could not be reached for comment.

— Phil Harvey, Senior Editor, Light Reading

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