Orckit Hunkers Down, Axes 90 Jobs
The Israeli company's earnings announcement, which came out Wednesday morning (U.S. time), did mention some staff trimming in an effort to cut expenses by 20 percent next quarter. But it was only on a conference call with analysts that Orckit revealed it had cut about 90 people. (See Orckit Reports Q3.)
"We didn't do it because we see any slowdown in our business. It's the other way around," CEO Izhak Tamir said on the call.
Orckit's reasoning is that it needs to go into cash-conserving mode in case the global economy dives into a prolonged recession. "This is a defensive state, just to make sure that, if worst comes to worst, we are still protected," he said.
Most of the cuts were in R&D, because the company is just emerging from a product-development cycle. Orckit recently brought out the Corrigent Systems Inc. CM-4140 and has other products nearing release, as noted here at the show. (See Corrigent Intros 4140 and Orckit's Next Trick.)
None of the layoffs were in "customer-oriented" areas such as marketing, Tamir said.
For its third quarter, which ended Sept. 30, Orckit reported revenues of $5.4 million and net losses of $9.7 million, or 59 cents per share. For the same quarter a year ago, Orckit reported revenues of $1.7 million and losses of $6.5 million, or 41 cents per share.
Tamir said the company would be on track to reach break-even late in 2009 if the economy doesn't continue to worsen.
— Craig Matsumoto, West Coast Editor, Light Reading