Tellabs Cutting 10% of Staff

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) is to cut 330 jobs, about 10 percent of its workforce, in an effort to save US$50 million a year in operating expenses, the transport equipment vendor announced Tuesday morning.

The restructuring program is expected to be completed by the end of the second quarter of 2012, but there are no further details on which parts of the company will be affected.

The news came as Tellabs reported a 21 percent year-on-year decline in second-quarter revenues to $334 million and a net loss of $20 million, compared with a net profit of $64 million a year ago, showing just how tough the North American transport infrastructure market is right now.

The vendor noted that its revenues from North America fell by 46 percent, while sales from overseas markets actually increased by 70 percent compared with a year ago. The trouble is, Tellabs is still very heavily reliant on the former market.

The news won't come as a major surprise to those who follow the company closely. It had an equally poor first quarter following a warning in January of troubles ahead. As a result, analysts, on average, had predicted second-quarter revenues of $336.9 million and a non-GAAP (after one-time costs) loss of 3 cents, slightly worse than the reported second-quarter non-GAAP loss of 2 cents per share. However, a year ago the vendor reported non-GAAP earnings of 17 cents per share. (See Tellabs Reports Q1 and Tellabs Tanks in Q4.)

The company's gross margins have also crashed, down to 37.4 percent from 53.5 percent a year ago.

Although third-quarter revenues are usually lower than the second quarter, Tellabs expects revenues for the current three-month period to be between $325 million and $345 million. However, analysts had expected revenues of $349.6 million for the third quarter.

The company's share price stood at $4.19 before the markets opened Tuesday.

— Ray Le Maistre, International Managing Editor, Light Reading

bollocks187 12/5/2012 | 4:58:04 PM
re: Tellabs Cutting 10% of Staff


Why are you laying off people - because your products suck or out of date. Chicago is the the dumb town of telecom. Change the way you do business and stop being a stalwart of going slow.




acucons 12/5/2012 | 4:58:03 PM
re: Tellabs Cutting 10% of Staff

Agree with other post.  I tried to work with Tellabs to recertify old DACS equipment, and their response was to threaten to sue my client if they sold the equipment used.   From then on, I crossed the off the list of any vendor I would evver consider using in a network design. 

Their future is tied into the former monopoly Bell companies with their legacy networks.  Not a good place to be.

paolo.franzoi 12/5/2012 | 4:58:02 PM
re: Tellabs Cutting 10% of Staff

1 - They are still in business because they have so much cash.  One would think a company like Sycamore would not be in business but they are.

2 - I am stunned that nobody reamed them about 24% of revenue in R&D and still the revenue is in decline.

3 - Where oh where are the WiChorus customers? (note dripping sarcasm)

4 - Also, anybody note the crater of margins as the 5500 revenues sink?  Hunh...wonder where the money is made?



Light-bulb 12/5/2012 | 4:57:58 PM
re: Tellabs Cutting 10% of Staff

Tellabs has been in a decline since the Telecom crash.  After their acquisition of Ocular back in the day and others the management have made poor desion after poor decision.  I had a front row seat as I watched the old bell head mentatlity gradually push the new products out to pature and how they continued to stay with the dinosaur DACS.  Yea... that's going to work-out.

The latest thing I see is their attempts to sell a pile of poo to the defense department and to government agencies involving GPON.  

They are literally spending money hand over fist to try and fill gaps in GPON to aim at Enterprise/government market.  Granted only the government and it's clown of Si's and SETA's could take such a gigantic steaming pile and try to mold(force-fit) it to fit some fairy tale BS of OPEX savings.  It's like seeing the world go backward, yes... lets go back to Vampire taps and giant broadcast networks...  yikes!


Can't help but shake my head.  

macster 12/5/2012 | 4:57:57 PM
re: Tellabs Cutting 10% of Staff

The drop in GM is staggering! WOuld love to know the reasons behind this.

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