x
Earnings reports

Sycamore: More Layoffs Coming?

The rumor mill has it that Sycamore Networks Inc. (Nasdaq: SCMR) is preparing for a massive layoff. Some sources are reporting that as much as 40 percent of its staff could be affected.

Possible? Certainly. The company's losses have mounted as its cash reserves have dwindled in the last year. At the end of its fiscal year 2000, Sycamore had more than $1.14 billion in cash and marketable securities, whereas it held $800 million in cash and marketable securities in the comparable reporting period in fiscal 2001, closing July 31, 2001. The company's stock price has been battered on its declining fortunes and the fear that it is burning through cash too fast.

Although a 40 percent cut in headcount seems drastic, it would not be out of line with the pace at which Sycamore's financials have declined. The company burned through $67.4 million worth of cash during its July quarter, which exceeded analyst expectations of a cash burn between $50 million and $60 million, according to a note published last month by Morgan Stanley Dean Witter & Co. Even though the company increased its cash position to $492.5 million from $295.0 million by selling some of its short-term securities, the company still looks as though it needs to cut its spending.

Sycamore's revenues peaked in the quarter ending January 27, 2001, when it reported revenues of $149.2 million and net income of $13.8 million. But during the quarter ending July 31, those numbers had dropped to revenue of $50 million and a net loss of $42.4 million. A 40 percent reduction in staff would reduce Sycamore’s current headcount of 950 down to about 570, putting it only 57 heads above its tally of 513 in April 2000, before it started a hiring blitz that took them as high as 1,118 employees. In April 2001 it laid off approximately 132 employees, or about 13 percent of its staff.

In the near term, the prognosis for a quick return to growth is grim. For the first fiscal quarter of 2002, which closes at the end of this month, Sycamore expects to generate revenue of between $30 million and $40 million, compared with $120.4 million during the same period a year ago.

Sycamore officials declined to comment.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
Page 1 / 3   >   >>
Belzebutt 12/4/2012 | 7:45:45 PM
re: Sycamore: More Layoffs Coming? in April of 2000, before it started a hiring blitz that took them as high as 1,118 employees.

Looks like NT is not the only one who had a hiring blitz, although it would seem like it from the comments...
PantomineHorse 12/4/2012 | 7:45:45 PM
re: Sycamore: More Layoffs Coming? Ah yes.

While a shareholder (for a short period in 1Q01), this is the company that I contacted to offer services to explore 'cost reduction initiatives' when it was becoming evident they had "issues".

Not even a courtesy response, so I sold-off and glad am I.

Problem starts at the top.
[email protected] 12/4/2012 | 7:45:44 PM
re: Sycamore: More Layoffs Coming? I read the same RealMoney.com post by Cody Willard where the author must have stolen her info. Disappoints me that she quotes 'some sources' when its obvious to anyone where she really got her info but didn't even have the guts to cite her sources.
HarveyMudd 12/4/2012 | 7:45:42 PM
re: Sycamore: More Layoffs Coming? If one looks at the company's website one gets a very confusing message regading its products and solutions. The company has run out of luck and can not be saved.

The market valuation was very high beyond imagination (nmore than General Motors). The bubble is burst now and the realties of the market place have begun to strike Sycamore.

The announced layoffs by Sycamore should have a taken place a long time ago.
Neophone 12/4/2012 | 7:45:42 PM
re: Sycamore: More Layoffs Coming? i don't know why so many advantages intelligent
sonet/optical company claim, but so bad markets
performance they own? ---if they really have
that virtue which traditional optical company
haven't.

who can tell me why? thanks.....


dljvjbsl 12/4/2012 | 7:45:41 PM
re: Sycamore: More Layoffs Coming? GJ writes
---------------------------------------------
I've been out of work for four months
with absolutely no opportunities in sight. The companies just keep
flooding the market with people and none of them have anywhere to go.
I've never felt so hopeless and despondent before in my life.

--------------------------------------------

Over 30 years ago I was in the same situation. I was laid off in hte Nixon recession of 1970 with little prospect for the future except returing to the same dead end job with the clear prospect of more layoffs.

I know how desparatet eh situation seems but rememner you are not condemened to remain in the opical industry forever. There are other opportunities out there that are not dependent on it.

I took advantage of the opportunity to return to school and change careers. If I hadn't been laid off then I would still be working in that same industry in the same dead end occupation.
GJ 12/4/2012 | 7:45:41 PM
re: Sycamore: More Layoffs Coming? I have no idea of what you are asking here. But to me it really doesn't matter anyway. It's all bad news. I've been out of work for four months with absolutely no opportunities in sight. The companies just keep flooding the market with people and none of them have anywhere to go. I've never felt so hopeless and despondent before in my life.

So all of you can sit here and laugh at the idiot managers and the unproven technology all you want. Just remember there are real people here with kids to care for and mortgages to pay. Wal-Mart can't absorb us all.
Metadata123 12/4/2012 | 7:45:40 PM
re: Sycamore: More Layoffs Coming? The Optical Transport industry that SCMR is in, is getting rapidly commoditized and over-extended beyond what the market requires or could reasonably require in the next ten years. This is one of the reasons that the Optical businesses of Nortel and Lucent are becoming largely irrelevant, soon to be followed by Ciena and ONI. SCMR has very little of a special sauce and there is no chance for it to have any enduring value whatsoever.

The founders built another useless company called Cascade, which is part of Lucent now. This product line was always dead end and Lucent has been telling its customers that it is End-of-Lifing these products in the next month. It is a shame that the founders have successfully conned the public markets twice and have managed to fatten their personal coffers in this manner. Others in the industry remember the arrogant swagger of these charlatans in 1999 and 2000 and hopes that it will be a call to other so-called GÇÿentrepreneursGÇÖ to be more ethical in their claims. And I hope the SEC finds enough criminal wrongdoing in their actions to prevent then to ever accessing the public markets again.

Bye bye GD! Hello Civilized World!
Neophone 12/4/2012 | 7:45:39 PM
re: Sycamore: More Layoffs Coming? i have no intention to laugh anyone cause we are
are here in same situation.

but i still wonder why with new technology
these start up company can't win?

without whole circumstnace,their poor market
behave is another reason?
dljvjbsl 12/4/2012 | 7:45:38 PM
re: Sycamore: More Layoffs Coming? Neophone writes:

but i still wonder why with new technology
these start up company can't win?


The main reason is that there is no market for these products. Enormous amnoutns of money were invested to build products that served no useful purpose to customers. Products were described with their technical capabilites and not with their benefits to paying customers. The start ups were supplying products with little customer value into a commodity market. They are now receiving fair valuations for the benefit that they give to the market.
Page 1 / 3   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE