Linthicum, MD -- Optical networking company Ciena Corporation has cut 650 people from its staff -- approximately 22...
March 26, 2002
Linthicum, MD — Optical networking company Ciena Corporation has cut 650 people from its staff — approximately 22 percent of its total workforce — in an effort to return the company to a more profitable state.
Gary Smith, Ciena’s president and CEO, said the company has to adjust to the changes in the telecom equipment market to maintain a leadership position. “Ciena’s future success depends on our ability to adapt the way we think and the way we run our business in this dynamic environment,” said Smith.
Ciena estimates that the job cuts will generate between US$145 to US$155 million in annualized cost savings, including approximately US$85 to US$90 million in operating expenses. The company expects the majority of the cost savings to be in place by its third fiscal quarter, 2002.
The company also expects a restructuring charge of between US$125 to US$135 million in association with these job cuts, lease terminations, non-cancellable lease costs and the write-down of certain property, equipment and leasehold improvements. In addition, Ciena expects a charge of approximately US$200 to US$225 million in association with its long-haul transport products and purchase commitments with suppliers.
Affected employees will be paid through May 24, 2002, says Ciena, and will be eligible for additional severance packages.