Optical networking equipment maker Ciena Corp. announced Tuesday that it was laying off 650 employees, or 22 percent of its workforce, effective immediately, in response to the ongoing slump in the telecommunications sector.
The affected employees will be paid through May 24, 2002 and will be eligible for additional severance packages, said company officials. Laid off workers will receive outplacement assistance and training as well.
Earlier this year, Ciena announced it was laying off 400 employees, a 12 percent workforce reduction, and closing of its Marlborough, Mass. research facility. In November of last year, Ciena announced it was laying off 380 employees, a ten percent workforce reduction.
"The telecom equipment market has changed dramatically in the last year and we have to adjust to those changes if we are to maintain our leadership position in the industry," said Gary Smith, CIENAs president and CEO, in a prepared statement Tuesday.
Ciena said it expects of see a yearly cost savings of between $145 and $155 million as a result of Tuesdays actions, prior to any related restructuring charges. Ciena estimated those charges to range between $125 and $135 million and to be recorded in the companys second fiscal quarter, to be fully reported in May.
The company will also see a charge of approximately $200 to $225 million for excess inventory in long-haul transport products and purchase commitments with suppliers, Ciena officials said.