Opnext Changes CEOs, Starts Cutting

The OFC/NFOEC party's over, especially for Opnext Inc. (Nasdaq: OPXT), where it's time to announce layoffs.

This morning, Opnext announced what's become the usual slate of recessionary cutbacks, including a 10 percent layoff, salary cuts, and removal of perks such as matching 401(k) contributions. (See Opnext Cuts Staff.)

Opnext employs about 630, including 200 acquired with StrataLight Communications in January. (See Opnext Completes StrataLight Buy.)

Opnext will also be moving its headquarters to StrataLight's home in Fremont, Calif., from Eatontown, N.J.

So begins the Gilles Bouchard era. He took over as CEO today, replacing Opnext's longtime chief, Harry Bosco, who becomes chairman. The move was announced in January when the StrataLight deal closed.

As analyst Paul Bonenfant of Morgan Keegan & Company Inc. noted in a note published this morning, Opnext's announcement didn't include any word about earnings for the fourth quarter, which ended in March. Going on the theory that no news is good news, that suggests revenues will match Opnext's forecast of $80 million to $90 million, compared with $70.5 million in the third quarter (which didn't include StrataLight).

"We guided very conservatively, and I'm pleased we did, because things are slow right now," Bouchard told Light Reading at OFC/NFOEC last week.

Bouchard hails from HP Inc. (NYSE: HPQ) and joined Opnext as chief operating officer in 2007. So he's bringing an outsider's eye to the optical components industry, having described it to Light Reading as one "too in love with its technology." (See Opnext Names COO and Coming Soon: An Optical Uptick?)

But Opnext isn't likely to do anything as drastic as shutting down the two fabs it owns. It's one of several optical components companies that believes it's an advantage to own part of the manufacturing process, rather than have everything built by contract manufacturers.

In part that's because indium phosphide (InP) fabs just aren't that plentiful. "You cannot go fabless as easily as you can in the silicon world," Bouchard told Light Reading.

He also noted last week that Opnext is trying to keep research and development humming even during the recession. "No major project has been dropped. Some minor ones have been delayed," he said.

Light Reading got a chance to talk with Bosco at the show as well, looking back on his CEO tenure:

— Craig Matsumoto, West Coast Editor, Light Reading