Sycamore cuts workers, products

Optical telecommunication equipment maker Sycamore Networks Inc. is halting development of optical transport devices and will cut approximately 235 US employees in a reorganization, the company announced Wednesday.

Sycamore, in Chelmsford, Massachusetts, will focus its business on optical switching products and integrate transport and transmission capabilities into its switches instead of selling standalone equipment, the company said in a statement. The downturn in investment by telecommunication carriers forced Sycamore to make the move, the company said.

The optical network equipment industry was hit hard beginning in late 2000 after carriers overbuilt networks for demand that has not yet been realized.

Sycamore will stop development of its SN 8000 and SN 10000 standalone transport systems and focus its resources on the SN 3000 and SN 16000 series of optical switches. As a result, the company will restructure its operations and consolidate its engineering organization. The work force will be reduced by approximately 235, the statement said.

The moves will result in costs ranging from US$45 million to $55 million but will result in quarterly cost savings of $15 million to $18 million starting from the first quarter of 2003, Sycamore said.

Also Wednesday, Sycamore announced a partnership with Siemens Information and Communications Networks, a unit of Munich-based industrial giant Siemens AG, in which Siemens will resell the company's optical switches around the world. The companies also will work to integrate products and network management, Sycamore said.