Corvis Makes More Cuts
Corvis Corp. (Nasdaq: CORV) confirmed Wednesday evening that it will cut approximately 180 more employees from its ranks as it continues to take down its operating expenses (see Corvis Lays Off 180). The company characterized the staff cuts as a consolidation of its R&D group.
"Due to the level of maturity and state of our product lines, we are able to use our research and development resources more efficiently," says Andrew Backman, Corvis's VP of investor relations. "This is part of an ongoing effort to lower our operating costs in line with the current market dynamic."
On Wednesday morning, Light Reading reported that, according to its sources, Corvis was going to cut between 200 and 250 jobs.
Corvis says Wednesday's cuts, as well as the reduction of about 164 jobs in its French subsidiary, will bring its headcount below 500 employees by the end of the first quarter 2003. The company's stated goal is to take its operating costs down to around $25 million a quarter, or below.
It's an aggressive goal, but Corvis has already reduced its quarterly burn rate remarkably. Corvis had a burn rate of $35 million in the third quarter of 2002, down from a rate of $148 million in the first quarter of 2001.
Indeed, with its stated cash and investments of $504 million and no debt, Corvis could run its business well into 2007 with little or no sales at all.
Of course, that's not the company's intent. Corvis says its level of engagement with carriers is as high as it's ever been.
Corvis is rumored to be in the running for an AT&T Corp. (NYSE: T) contract in the range of $50 million. But Ciena Corp. (Nasdaq: CIEN) is also said to be close to winning this deal, and it has already sold to an AT&T subsidiary (see Ciena's Optical Switch Fiesta). Analysts say it's a long evaluation process that isn't going to wrap up anytime soon.
— Phil Harvey, Senior Editor, Light Reading