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Headcount: Cabin Pressure

Light Reading
News Analysis
Light Reading
10/29/2003

JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) is no longer part of the telecom jet set. In addition to laying off workers and selling real estate to cut costs last quarter, the components company also got rid of its corporate jet, according to published reports. Speaking of JDSU's costs, the company's new CEO, Kevin Kennedy (see JDSU Launches Regime Change), is pulling down a nice check -- though it's not Kevin Kalkoven-style money (see 2001 Top Ten: Fat Cats). Kennedy's annual salary is $500,000, which bumps to $575,000 next year. He's also in line for a hiring bonus of $500,000 and another cash bonus of $250,000 to be used for company stock purchases. Well, we're not making any kind of Kevin money, but that won't stop us from bringing you the most interesting telecom employment news from the past several days.

  • Rumors that Nortel Networks Corp. (NYSE/Toronto: NT) was cutting staff, as printed in the Canadian press last week, just weren't true. Or were they? Frankly, we're stumped. Nortel said during its third-quarter earnings conference call (see Nortel Keeps to Profit Path) that its headcount was "tracking below 36,000." Its most recent quarterly call put the headcount at "approximately 35,500." In addition to cutting staff, Nortel has trimmed its facilities as well. In the past three years, the company says it has closed or sold about 450 of its facilities -- a reduction of about 20 million square feet.
  • Westwave Communications has sold its softswitch software to Alcatel and shut its doors, according to a report in the Santa Rosa, Calif., Press Democrat. At its peak, Westwave employed 120 folks and had raised nearly $65 million from Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and several venture investors.
  • Deutsche Telekom AG (NYSE: DT) says it will cut hours and wages for 100,000 German employees, about 40 percent of its work force, as a way to schneiden its debt. The affected employees, mainly at the T-Com fixed-line unit, will be asked to work at least 10 percent fewer hours, effectively taking a pay cut of the same amount, according to The Associated Press.
  • Optical Solutions Inc. CEO Darryl Ponder says his company cut 19 jobs last week, mostly in engineering, leaving the company with 78 full-time workers. He says the PON company continues to do well, with more than 54 customer deployments so far, but it still needs to conserve cash where possible. The company recently announced a $15 million funding round, in which Cisco Systems Inc. (Nasdaq: CSCO) became an investor. Ponder acknowledges that Optical Solutions and Cisco responded together to the RBOC FTTP RFP! this summer.
  • Redback Networks Inc. (Nasdaq: RBAK) is still cutting costs as it prepares to face shareholders and ask for their support in keeping it out of bankruptcy court, a source close to the company says. Redback is said to have cut 20 employees this week and will likely make deeper cuts if the company is forced to file for a Chapter 11 reorganization. Redback declined to comment on the cuts, but said the real story was not its staff size, but its exceptional third quarter (see Redback Reports on 3Q03). The company reported a loss of $18.1 million, or 10 cents a share, on revenues of $27.4 million. That may not seem awfully boastworthy, but the revenue number represented a 58 percent jump over Redback's year-ago quarter.

    Here's what else has happened across the telecom employment world in the past several days:

    That's all for now. Until next time, keep those tray tables locked and your seat belts fastened. And, if you have a Headcount tip, send it to [email protected] along with one of those Dewar's minis so we can "flavor" our coffee.

    — Phil Harvey, Senior Editor, Light Reading

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    crapshooter
    crapshooter
    12/4/2012 | 11:18:23 PM
    re: Headcount: Cabin Pressure
    At least DT's employees get to cut their hours along with their pay. My company (and I know I am not alone) cut pay but we're all working more hours.

    American companies need to look at this policy. Granted, I am fortunate to have a paycheck in telecom when so many don't, but it's insulting to have your pay cut and then be asked to work tons of free overtime.

    Just my $0.02.
    RouterOttawa
    RouterOttawa
    12/4/2012 | 11:18:22 PM
    re: Headcount: Cabin Pressure
    I guess CISCO must be in stealth mode. They let 20-30 people go from their Ottawa operation 2 or 3 weeks ago. Perhaps this was part of their normal culling of the herd. Perhaps not.
    dljvjbsl
    dljvjbsl
    12/4/2012 | 11:18:21 PM
    re: Headcount: Cabin Pressure
    Does anyone know if the Westwave softswitch will be kept alive within Alcatel? Is this closure typical of what is happening in the softswitch market?

    It is tragic for those involved but I have never seen a convincing case made for softswitches. The carriers have spent billions on the AIN. The services offered by the Westwave Vswitch product are purely of the AIN type. Why would providers abandon their AIN to invest in technology that offers nothing new?
    dljvjbsl
    dljvjbsl
    12/4/2012 | 11:18:21 PM
    re: Headcount: Cabin Pressure
    Does anyone know if the Westwave softswitch will be kept alive within Alcatel? Is this closure typical of what is happening in the softswitch market?

    It is tragic for those involved but I have never seen a convincing case made for softswitches. The carriers have spent billions on the AIN. The services offered by the Westwave Vswitch product are purely of the AIN type. Why would providers abandon their AIN to invest in technology that offers nothing new?
    pump up the volume
    pump up the volume
    12/4/2012 | 11:18:18 PM
    re: Headcount: Cabin Pressure
    Word on the street is that Nauticus has received funding - either a bridge loan or a new round - and will bring back furloughed workers. Good news for once if true.
    jim_smith
    jim_smith
    12/4/2012 | 11:18:18 PM
    re: Headcount: Cabin Pressure
    How can Cisco manage not to layoff people?

    Many folks on this board have claimed that Cisco has cut throat pricing, yet they seem to hold their margins.

    Most probably they have survived thus far by screwing their suppliers, but sooner or later reality is going to catch up with them. Any guesses as to when?
    ooj
    ooj
    12/4/2012 | 11:18:17 PM
    re: Headcount: Cabin Pressure
    I heard, secondhand, that a longtime fiber optic type in San Jose "is no longer with Cisco" as of last week and it wasn't because he jumped to another opportunity.

    Other info that the optical networking BU has headcount out of balance with revenue and is working on correcting that problem.

    ooj
    turing
    turing
    12/4/2012 | 11:18:14 PM
    re: Headcount: Cabin Pressure
    Word on the street is that Nauticus has received funding - either a bridge loan or a new round - and will bring back furloughed workers. Good news for once if true.
    -------------

    Last time I checked closing your doors and then re-opening with a bridge loan is not a good sign. How many customers would trust you to stay alive from then on? And you've got to believe the engineers would be searching monster half the day...

    xip42
    xip42
    12/4/2012 | 11:18:11 PM
    re: Headcount: Cabin Pressure
    Policy??

    I don't think US or European companies have a policy in this matter.

    In the US they can layoff employees so they do. In the US they can make you work more hours for less pay because they can. They do this because they can layoff employees, hence the employee is afraid and hence will work more hours for less pay.

    In Europe the very restrictive employment laws may make it virtually impossible to layoff employees hence the hours and pay cut. DT needs to save money, but they can't lay you off, they can't cut your hourly wage, but they can reduce your hours. So that's what they do.

    While i wish my hours would be correspondingly reduced with a pay cut, it creates an uncompetitive situation. The European "policies" make it difficult for companies to adapt and reduces their global competitiveness. The US "policy" is much better competition wise, but i agree it sucks for the workers in many cases.

    While the US "policy" sucks for workers many times, it is actually better overall since the competitiveness it allows helps companies survive and hence employ people.

    If for example the US adapted European ways of running a business, i would shutter to think of the devastation that would be caused to our economy.


    fhe
    fhe
    12/4/2012 | 11:18:10 PM
    re: Headcount: Cabin Pressure
    The policy we want to have in the US is to further limit the H-1B or L1 visas. In Europe, there is a very strict working visa policy, it it means the foreign worker is going to take the local's position, it is against the law...

    So, if we can have the US working hour policy (to increase competitiveness), the Europe visa policy (to protect local's employment opportunity), and lastly, slap huge taxes on companies which offshored their jobs (again, to protect local's), then we should be good.
    Page 1 / 2   >   >>
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