CHELMSFORD, Mass. -- Sycamore Networks, Inc. (NASDAQ: SCMR - News), a leader in optical networking, today announced a workforce reduction of approximately 20 employees. The reduction, effective immediately, represents approximately 6 percent of Sycamore's total employee base.

"While the decision to eliminate the positions of talented and dedicated employees is extremely difficult, these actions are necessary in light of the ongoing challenges we face in the optical networking market," said Daniel E. Smith, Sycamore's president and chief executive officer. "The company remains focused on careful expense management as we continue to review our strategic and financial alternatives."

As a result of these actions, the company expects to record a restructuring charge of between $1 million to $1.6 million in its third quarter fiscal 2005, approximately half of which constitutes severance and other employee-related expenses. The affected positions are primarily in the company's engineering organization and are associated with the rationalization of certain R&D initiatives. Also, in connection with this rationalization, the company will not be renewing a similar number of independent consultant contracts associated with these R&D initiatives. This reduction does not impact development or commitments on the company's existing product platforms. Employees affected by the reduction will receive separation packages, which include severance pay, benefits and outplacement services.

Sycamore Networks Inc.