Tellabs to cut 1,200 more
 
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Telecom equipment maker Tellabs is laying off 1,200 more employees and closing another plant in an effort to cut expenses as its first quarter revenue dipped $99 million from the previous quarter, most of it attributable to declining sales of its optical gear.
Following two 1,000-person layoffs last year, the company this week announced its third round of personnel cuts and says it will close a plant in Ronkonkoma, N.Y., as well as smaller facilities it did not identify. The reductions mean a savings of $120 million this year, Tellabs says.
The company said last year it was redefining itself and focusing more of its attention on optical networking, specifically its Tellabs 71000 dense wave division multiplexing switch. It also bought Ocular Networks, which makes a combination SONET multiplexer-digital cross connect-optical switch.
The company said the cuts were a reflection of carrier spending cutbacks.
Despite all the negative numbers, the financial firm UBS Warburg says Tellabs had a strong balance sheet and that some of its gear has a bright future once carrier spending picks up.
"Tellabs indicated ongoing customer trials for the 6400/6410 (recently acquired from Ocular) are going well and revenues should be recognized in the second quarter," the investment firm stated in a newsletter. "This is a quarter ahead of our estimate. These products could be a pleasant surprise and provide Tellabs another longer term growth product."
Still, that has yet to be proved, according to the financial firm Merrill Lynch.
"Management's challenge - prove the new products can indeed gain more traction," the firm said in a report.
Last November, Tellabs cut 1,000 employees and closed plants in Texas and Minnesota. In August, the company cut 1,000 employees and closed plants in Ireland and Chelmsford, Mass.
In June, it dropped its revenue estimates for the quarter from between $780 million and $820 million down to $500 million, and blamed the drop on carrier spending cutbacks. In May, the company dropped the softswitch technology it obtained from its acquisition of Salix.
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