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Optical/IP

Layoffs Top 90,000

A total of more than 90,000 people have been laid off as a result of the bubble bursting in the optical networking industry, according to a survey conducted by Light Reading.

The results, published today (see Grim Reaping: A Downturn Tally), make grim reading. Among the 40 public companies represented in the Light Reading Index, 24 have undergone workforce reductions this year. The total body count comes to more than 84,000 people, and is continuing to increase.

Somewhat symbolically, the company that was riding highest last year -- Nortel Networks Corp. (NYSE/Toronto: NT) -- has taken the biggest fall. Its layoff total of 30,000 is three times bigger than the next company on Light Reading's list, Lucent Technologies Inc. (NYSE: LU)

In terms of percentages of total workforces, however, components manufacturers have come off considerably worse. Avanex Corp. (Nasdaq: AVNX) has shed 56 percent of its staff, and New Focus Inc. (Nasdaq: NUFO) has shed 43 percent.

Among startups, the companies that have made the deepest cuts in staff numbers include:

  • Tachion Networks, which has shed 37 percent of its staff, 169 people;
  • Valiant Networks Inc., 30 percent of its staff, 41 people;
  • WaveSplitter Technologies Inc., 26 percent of its staff, 83 people;
  • Alidian Networks Inc., 25 percent of its staff, 55 people.

    — Peter Heywood, Founding Editor, Light Reading
    http://www.lightreading.com
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    jimmy 12/4/2012 | 8:06:17 PM
    re: Layoffs Top 90,000 The following is from FT.com;

    John Roth claims "....optical backbone products, hardest hit by the downturn, would take an "extended investment holiday"." If I were a customer, I would be concerned about feature rollout....I just don't understand why he would say this....please stop the assult...the troops are demoralized enough!!!!!!!!!!!!!!


    Times have changed for Nortel's former hero
    FT.com site; Jun 21, 2001
    BY SCOTT MORRISON IN TORONTO


    It can't be easy being John Roth these days.
    A triumphant hero in Canada until early this year, the chief executive of Nortel Networks is now seen as one of the top corporate villians in the country's history.
    No one can blame Mr Roth for the collapse this year of the market for fibre-optic networks. The dramatic plunge in sales has sent Nortel - and its rivals - scrambling to adjust to the worst downturn Mr Roth has seen during his 30 years in the industry.
    He has been criticised by analysts and investors for not seeing - and reacting - to the downturn earlier than he did. He argues that demand from carrier customers prompted him to continue adding capacity right up to the end of 2000, even as the industry outlook quietly began to take a turn for the worse.
    But Mr Roth clearly isn't in the mood to discuss the past. He is much more interested in selling his company's restructuring plan, one that involves cutting 30,000 jobs, quitting non-core business lines, taking massive write-downs, and even halting dividend payments.
    The idea is to downsize Nortel by about one third, so that the company can operate on US$5bn in quarterly revenues, or about US$20bn a year. "When we mention US$5bn, we don't just want to break even. We want to make a good profit at that level," he says.
    But Mr Roth is quick to acknowledge that the US$20bn level is a "best guess" estimate given that his company cannot accurately predict when customers will start buying and how much they will buy once they start reinvesting in telecoms systems.
    "If it turns out that US$5bn is too high then we'll have to cut deeper," he says. "We are really looking forward to telling our organisation we are at the right size."
    Nortel has already said it would shut down its broadband and narrowband access units and many observers have said the next to go will be the group's customer relationship management software unit, its enterprise division and even its optical component manufacturing operations.
    Mr Roth would not address such speculation, but he did argue that it would be prohibitively expensive to build a direct sales organisation to market enterprise products in order to compete with Cisco, which dominates that market.
    And he appeared to rule out the sale of Nortel's optical components business, at least for now. The company has talked about spinning out a minority stake of the unit, so that it could maintain control to ensure it had reliable supplies.
    That issue is no longer as important as it was when Nortel and its rivals couldn't make equipment fast enough to keep up with demand. "As time goes on, control [of our optical unit] is less and less important. But it is not clear we are willing to surrender control today," he says.
    But even as it cuts, Nortel cannot afford to sacrifice its potential to meet demand once customers return to the market. Mr Roth says he is personally overseeing "eight well defined R&D projects" he considers crucial to the future of the company.
    He declines to identify these but says they are spread across the company's core product areas, including wireless infrastructure and internet protocol capability. He says optical backbone products, hardest hit by the downturn, would take an "extended investment holiday".
    The company's other priority is to find a successor to Mr Roth, who initially planned to retire at the annual meeting earlier this year. That came to nothing after heir apparent Clarence Chandron stepped down for medical reasons. Mr Roth, who is now slated to retire next April, is reluctant to discuss the circumstances surrounding Mr Chandron's resignation other than to say: "It didn't work out."
    Mr Roth downplays the "vision" thing, noting that the significant technological discontinuity in the industry - the shift from circuit switching to packet switching - is already well underway. "This is not a matter of big strategy. It's about execution and getting it done," he says.



    lighthearted 12/4/2012 | 8:06:16 PM
    re: Layoffs Top 90,000 care to be more specific?
    noitall 12/4/2012 | 8:06:16 PM
    re: Layoffs Top 90,000 downsizing, that is ;-)

    the sp business at cisco is about to get a nuclear bomb dropped on it...
    brichter 12/4/2012 | 8:06:15 PM
    re: Layoffs Top 90,000 Of course not. Straight out the side of his neck.
    Belzebutt 12/4/2012 | 8:06:13 PM
    re: Layoffs Top 90,000 In Lucent's case, I really don't see how they can get away with "only" 10,000 layoffs, since they have more staff than Nortel, less revenues, and they're bleeding from every orifice. If they don't announce a lot more layoffs...
    lo_mein_noodles 12/4/2012 | 8:06:13 PM
    re: Layoffs Top 90,000 cmon noitall...out with it. Ya can't leave it at that..would that be an internal thermal nuclear weapon or an external ballistic missile??? change your name to dotellitall..and let it slip.:-)
    ivehadit 12/4/2012 | 8:06:12 PM
    re: Layoffs Top 90,000 lucent has announced:
    10K initially (supposedly done)
    8.5K with the retirement package
    another 10K going soon
    6K expected to go with fiber business
    untold number going with sale of plants
    some 20K went with agere

    its typical lucent. piecemeal, but a lot of change. the company projects to be at around 60K by end of year, just like nortel.
    tom 12/4/2012 | 8:06:11 PM
    re: Layoffs Top 90,000 if your interested there are excellent opportunities available, let me know if interested

    TR
    spectre 12/4/2012 | 8:06:11 PM
    re: Layoffs Top 90,000 Kestrel had two rounds of layoffs within one month's time. The first layoff was about 70 people at the end of May, and the second round of layoffs in late June were close to 100 people. Why isn't this mentioned?
    spore 12/4/2012 | 8:06:09 PM
    re: Layoffs Top 90,000 If there are any openings in marketing communications, I would be most interested.

    spore
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