Optical equipment vendor Coriant has cut about 100 jobs, roughly 4% of its workforce, at its Naperville, Ill., headquarters, Light Reading has learned.
Industry sources provided the number of jobs impacted, while optical sector analyst Andrew Schmitt, founder of research firm Cignal AI, found that sales, engineering and product line management had all been impacted.
Coriant declined to comment: It says that as a private company (it is owned by Marlin Equity Partners) it does not comment on its financials or staffing matters.
Light Reading estimates, based on data from a number of sources, that the Coriant headcount is in the region of 2,500 before these cuts.
The cuts are the latest in an ongoing reduction in staffing levels at the company, which was formed by Marlin through the merger of the optical unit of Nokia Siemens Networks, Tellabs and the remains of Sycamore Networks. (See Tellabs to Be Sold to Marlin for $891M, Coriant Soaks Up Sycamore, Coriant Counts on NSN's Optical Strengths and Coriant Boasts 'SDN-Plus' System.)
In part that's a reflection of the pressures faced by challengers in the optical sector. While Coriant is a well-established player with more than 200 customers, a recognized optical market brand and a range of metro (including data center interconnect) and long-haul transport products, global market momentum and influence lies largely with a core group of vendors that includes Ciena Corp. (NYSE: CIEN), Huawei Technologies Co. Ltd. , Infinera Corp. (Nasdaq: INFN) and Nokia Corp. (NYSE: NOK) (courtesy of its Alcatel-Lucent acquisition).
It's also identified as a company that can be strategically targeted by its rivals as they seek to win market share in a sector that, perhaps more than any other, is cut-throat, with network operators constantly demanding lower prices and the vendors constantly aiming to further erode the cost per bit transported. Such intense competition recently sent optical equipment vendor Xtera into bankruptcy. (See Xtera Slashes Headcount as Liquidity Crunch Intensifies, Say Sources.)
The financial pressures have been made even more acute in the past 12 to 24 months by the likes of Facebook , which is aiming to increase competition and further reduce equipment prices with its Telecom Infra Project (TIP), and Microsoft Corp. (Nasdaq: MSFT), which is working with module vendors to obviate the need for dedicated data center interconnect (DCI) systems. (See Microsoft Drops a Data Center Interconnect Bombshell and Facebook: TIP Will Open Telecom Hardware.)
Coriant, by the way, is active in the TIP program. (See Coriant Announces Support for TIP's Voyager.)
There's still business to be won for the systems vendors, of course. The growth of video traffic on networks, the data volume growth driven by cloud computing and the impending 5G era all create demand for transport network capacity, but the market isn't likely to get too much bigger than it is just now -- according to Heavy Reading 's optical trackers, the total market for metro and core optical equipment will grow from $12.66 billion in 2016 to $13.66 billion in 2019 -- and it is subject to sudden peaks and troughs that can catch out any of the vendors. (See Infinera Reports Q3 Sales Slump.)
And further market consolidation looks likely: While the long haul market might still support only a handful of significant players, and the subsea sector even fewer, the metro optical systems market boasts up to 20 active vendors, including the likes of ADVA, Cisco, ECI, Fujitsu and ZTE as well as the companies previously named and other specialists -- and it's a market that can't hope to support that many in the long term.
Coriant, meanwhile, continues to announce new business and new industry engagements, including a 400G trial with AT&T. (See AT&T Looks to Push Industry Faster to 400G, SK Telecom Uses Coriant 100G on Subsea Link and Italy's Retelit to Deploy Coriant's 100G Gear.)
Significant job cuts, though, are likely to cast a shadow over anything other than sustained new and major business with Tier 1 telcos, cable operators or data center giants.
— Ray Le Maistre, , Editor-in-Chief, Light Reading