Ciena Cuts 1/4 of Staff

Good luck getting a seat at Gordon Biersch this afternoon. San Jose's bars will probably be overrun as Ciena Corp. (Nasdaq: CIEN) announced it will cut some 25 percent of its employees -- 425 people -- in order to begin closing its San Jose offices and consolidating those plants (see Ciena to Cut 425 Jobs).

The move, while huge in scope, isn't a surprise. Faced with poorly performing optical and long-haul product lines for several quarters now, Ciena vowed that it would cut its costs by between 10 and 20 percent by the year's end.

With these cuts, Ciena is trying to signal that it is serious about becoming a data networking vendor. Sources close to Internet Photonics Inc. and Catena Networks Inc. say Ciena was discussing its plans to cut back its optical staff even while negotiating to buy those companies. The two soon-to-be-acquired firms aren't affected by this announcement.

The cuts are significant, too, in that they effectively signal the end of any remaining remnants of ONI Systems, Lightera, and Cyras -- three Ciena-acquired companies that were all located near San Jose.

The products being developed and supported in San Jose will be supported by other Ciena teams across the country. CoreDirector development will take place in Alpharetta, Ga., and Ciena's headquarters in Linthicum, Md. And the Online WDM platforms will be handled out of Research Triangle Park, NC. It's not clear what will come of Ciena's next-generation Sonet system, MetroDirector K2.

The cuts will save Ciena between $60 million and $70 million a year. The company expects to take a total restructuring charge against earnings of between $75 million and $85 million to pay for the restructuring.

— Phil Harvey, News Editor, Light Reading

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truelight 12/5/2012 | 1:59:44 AM
re: Ciena Cuts 1/4 of Staff Is this end of the company or the sign of huge shift to multiservice access. I thought that the Coredirector/ONI and K2(international) done well for Ciena ?

edgehead 12/5/2012 | 1:59:43 AM
re: Ciena Cuts 1/4 of Staff ...it's cheaper than Gordon Biersch and has a better juke box.
dbostan 12/5/2012 | 1:59:43 AM
re: Ciena Cuts 1/4 of Staff After buying left and right, some good companies, like ONI or Lightera, and bad companies, like Cyras, Ciena faces the music.
It is unfortunate that so many good people will suffer for the mismanagement of the company.
However, that comes at no surprise, since I still have to see an East Coast company successfully integrating West Coast acquisition...
jeb_knucklehead 12/5/2012 | 1:59:40 AM
re: Ciena Cuts 1/4 of Staff edgehead-

I'd suggest O'Flaherty's over on San Pedro. It's a little more expensive but the service is better and drinks aren't all watery
wonderfull 12/5/2012 | 1:59:39 AM
re: Ciena Cuts 1/4 of Staff Lightera employees made several millions on average....time for another paid vacation..
lightsoul 12/5/2012 | 1:59:27 AM
re: Ciena Cuts 1/4 of Staff Isn't some of ONI products are being offshore'ed to Wipro?
dwdmguy 12/5/2012 | 1:59:15 AM
re: Ciena Cuts 1/4 of Staff Who is buying new coredirectors? Looks like lucent, sycamore, and cisco are the only ones selling new sts-1 switches. Ciena must just have run rate business from existing coredirector customers. too bad about ONI.
sevenbrooks 12/5/2012 | 1:59:15 AM
re: Ciena Cuts 1/4 of Staff
Well, ONI ended up like Cyras. No sales. But it is amazing that the product that is making Money (Coredirector) is being moved. Guess its the Long Haul engineers will need jobs and its cheaper than flying to the west coast.

BlueWater66 12/5/2012 | 1:59:14 AM
re: Ciena Cuts 1/4 of Staff Is Ciena still working on true multi-shelf versions of the Coredirect? For years they were talking about a huge, big iron version that could connect about a dozen shelves together. At Supercomm, I think their sales guy called it the "CDXL"... or maybe it was their competitor's salesman :-) I can't remember.

I've also heard that they were working on a scaled down version, with a smaller multi-shelf structure that would sit in the metro. I guess this would be similar to Tellabs 5500-NGX-MX.

I suppost this is all this dead.... the CA group has been chasing their tails for quite a while. Poor guys. At least the Si Valley job market is improving (a little).
unet 12/5/2012 | 1:59:14 AM
re: Ciena Cuts 1/4 of Staff how about some data/facts to back up your view?
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