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Orckit Hunkers Down, Axes 90 Jobs

ANAHEIM, Calif. -- TelcoTV -- How's this for gloom? Orckit Communications Ltd. (Nasdaq: ORCT) has laid off one third of its employees.

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.

Ah...

— Craig Matsumoto, West Coast Editor, Light Reading

Stevery 12/5/2012 | 3:27:06 PM
re: Orckit Hunkers Down, Axes 90 Jobs "We didn't do it [the layoff] because we see any slowdown in our business. It's the other way around," CEO Izhak Tamir said on the call.

I also celebrate the success of my company by having a good layoff. Nothing else quite gives you that nice warm fuzzy feeling.
Sterling Perrin 12/5/2012 | 3:27:03 PM
re: Orckit Hunkers Down, Axes 90 Jobs I have to say this call was definitely bizarre. The CEO seemed surprised that financial analysts were interested in this topic of laying off a huge chunk of the company. As Craig noted, the earnings press release barely mentions the layoffs at all.

Sterling
Sisyphus 12/5/2012 | 3:27:03 PM
re: Orckit Hunkers Down, Axes 90 Jobs Indeed, the CEO's statement has to be one of those idiotic, against all logic statements. Like, "who are you gonna believe, me or your own eyes?" Err... my own eyes, thanks. What a stupid thing to say when you are showing people the door.
macster 12/5/2012 | 3:26:50 PM
re: Orckit Hunkers Down, Axes 90 Jobs "I also celebrate the success of my company by having a good layoff. Nothing else quite gives you that nice warm fuzzy feeling."

LR posted an article on Hatteras doing the same!
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