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Corvis Makes More Cuts

Light Reading
News Analysis
Light Reading
1/29/2003

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

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cfaller
cfaller
12/5/2012 | 12:46:03 AM
re: Corvis Makes More Cuts
Actually, this could be good news. If the layoff ends up being 200-300 people in addition to the layoffs in France, then this would make a significant difference in the cash burn.

A $50 million contract from AT&T would help Corvis, but it won't guarantee their survival. CORV needs more revenue than that.

My opinion is that if CORV actually goes through with this layoff, then this represents PROGRESS! It could mean that CORV is actually serious about surviving! Now all you CORV fans can start celebrating...
Reindeer
Reindeer
12/5/2012 | 12:46:03 AM
re: Corvis Makes More Cuts
Hi Dave77777,

Long time no banter. Can you please shed light on how this is good news and can only solidify your proposed Corvis business strategy?

Thanks
metamucil
metamucil
12/5/2012 | 12:46:03 AM
re: Corvis Makes More Cuts

Dear Reindeer,

I, DOCTOR David Huber, have decided to respond to your issue directly. I find that this will allow me to clear the air once and for all.

You see I, DOCTOR David Huber, have solved all the problems of the Telecommunications Industry. My solutions have been revealed to you. You may wish to gander at my home page, as you will note it will soon substitute for the 10 Commandments.

Unfortunately, they Telecom Industry is full of people not as smart as me, DOCTOR David Huber. This has led to the slow uptake of sales for MY products.

The good news for my investors is that I, DOCTOR David Huber, have a plan. MY products are so advanced that in fact we can stop working on them for a period of time. When I, DOCTOR David Huber, have run the stupid people out of the Telecom Industry, sales will pick up for our current products.

At that time I, DOCTOR David Huber, will solve World Peace, Hunger, Poverty, and Acne.

Thank you very much for your worship

David R. Huber, PH.D.
metamucil
metamucil
12/5/2012 | 12:46:03 AM
re: Corvis Makes More Cuts

Dear Reindeer,

I, DOCTOR David Huber, have decided to respond to your issue directly. I find that this will allow me to clear the air once and for all.

You see I, DOCTOR David Huber, have solved all the problems of the Telecommunications Industry. My solutions have been revealed to you. You may wish to gander at my home page, as you will note it will soon substitute for the 10 Commandments.

Unfortunately, they Telecom Industry is full of people not as smart as me, DOCTOR David Huber. This has led to the slow uptake of sales for MY products.

The good news for my investors is that I, DOCTOR David Huber, have a plan. MY products are so advanced that in fact we can stop working on them for a period of time. When I, DOCTOR David Huber, have run the stupid people out of the Telecom Industry, sales will pick up for our current products.

At that time I, DOCTOR David Huber, will solve World Peace, Hunger, Poverty, and Acne.

Thank you very much for your worship

David R. Huber, PH.D.
gea
gea
12/5/2012 | 12:46:01 AM
re: Corvis Makes More Cuts
"Long time no banter. Can you please shed light on how this is good news and can only solidify your proposed Corvis business strategy?"

Now now, Reindeer...is it that time of the month? Toss back a couple of Midol and don't pick on poor lil' Dave7777...right now he's dreaming of that big Winnebago he's going to buy when Corvis passes the $200 mark (ie, where he bought it)!
CogswellCogs
CogswellCogs
12/5/2012 | 12:46:01 AM
re: Corvis Makes More Cuts
Re: metamucil

This is obviously a fake, since Dr. David Huber would know how to post a message without double-posting. So would a 10 year old.

Moron.

Hope this helps,

Cogs
gea
gea
12/5/2012 | 12:45:59 AM
re: Corvis Makes More Cuts
"This is obviously a fake"

Wow. A fake. I would have never guessed.
CogswellCogs
CogswellCogs
12/5/2012 | 12:45:56 AM
re: Corvis Makes More Cuts
I suppose I should have used the stupid smiley face :) to indicate humor for those who may misinterpret the meaning of my post.

Cogs
ohub
ohub
12/5/2012 | 12:45:55 AM
re: Corvis Makes More Cuts
Bad economy. Cash burn will continue. Who can keep up till the last will win.

Optical Hub
http://www.ohub.net
googol_byte
googol_byte
12/5/2012 | 12:45:54 AM
re: Corvis Makes More Cuts
Here's what I recall:

- 5 major rounds of cuts - April 2001 (voluntary), November 2001, March 2002, June 2002, August 2002 (EMEA), with some additional minor cuts along the way

- As of the June 2002 cuts, headcount went from about 1000 (including France and Dorsal) to about 900

- About 200 were let go from France, leaving roughly 30 people in EMEA by the end of September

- A few more departures (SVP Mktg, VP HR) with a handful of strategic hires over the fall 2002

- 20 people from Dorsal (about 20%) at the beginning of January

- Current headcount before today: ~680
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