Ciena Streamlines Sales
Michael McCarthy, Ciena's senior VP of worldwide sales and support, has left Ciena, and CEO Gary Smith has assumed his duties until a replacement is found. Other coming departures include Claude Achcar, Ciena's Asia Region VP, and Arely Castellon, Ciena's VP and general manager for Latin America and the Caribbean.
"The focus of the company has changed," says Glenn Jasper, a Ciena spokesman. "Because of the downturn, over the past several months, we've focused more on the top 30 carriers or so in the world. It's not a matter of administration -- it's a matter of targeting those carriers."
Over the years, Ciena's sales management has taken many shapes. Many close to the company say McCarthy's appointment had always been a source of intrigue. Ciena critics wailed when McCarthy, a career lawyer, was handed a sales job by Smith, a rookie CEO, in May 2001.
McCarthy replaced Chris Simpson, who only held the job for about a year. Simpson is now with Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7).
The shape-shifting occurred at other levels, too. One post that did not survive Ciena's restructuring is that of the VP of North American sales. Richard Bibb held the job from November 1999 to June 2000. He was succeeded by Barbara Blanck, who took the post in February 2001 (see Ciena Picks N. American Sales Chief). Blanck, however, quietly left the company more than a year ago. That particular blank has not been filled.
Achcar and Castellon find themselves in similar positions now, as the structure of Ciena's sales management becomes more about big-name carriers and less about geographic territories. Castellon has been with Ciena since March 1999; Achcar led Ciena's Asian headquarters, which opened in June 2001 (see Ciena Opens Hong Kong Office).
Changes in Ciena's sales force are hardly surprising, given that during Ciena's most recent quarter, the company posted a disappointing net loss of $160 million on revenues of $50 million.
Not only did Ciena turn in low revenues for the quarter, it also missed Wall Street's revenue expectations by nearly $20 million (see Ciena Follows the Incumbents). On the conference call, CEO Gary Smith said the company would focus its sales efforts on incumbent carriers -- both in the U.S. and abroad.
A while later, Ciena announced it was firing about 450 employees, roughly 17 percent of its workforce, in order to control costs (see Ciena Cuts 450 Jobs).
In recent years, the top sales jobs have churned often at Ciena, former employees say. "Ciena has prided itself as being a tech company, and they don't have an appreciation for sales or marketing and have not spent enough time grooming talent there," says one former Ciena executive.
"I wonder if this [change] presages more head cuts," says Gina Sockolow, an analyst at Buckingham Research Associates (BRA). "The Street's been all over Ciena to slow their cash burn."
Ciena's next earnings announcement comes in early December. The company's shares were down $0.45 (11.4%) to $3.50 in trading on Monday.
— Phil Harvey, Senior Editor, Light Reading
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