Ciena cuts jobs as sales dive

Optical networking equipment vendor Ciena Corp today reported fiscal first-quarter earnings that showed a 26 percent drop in revenue to $167.4 million. The company also posted a net loss of $24.8 million that was a sharp reversal from the same quarter last year, in which Ciena reported a profit of $28.8 million.

The company said it is cutting about 200 jobs and shutting down an R&D facility. Ciena CEO Gary Smith also said that carrier spending has tightened to the point that capex for the vendor's top 10 carrier customers is a smaller percentage of those carriers' own revenue than it has been in several years.

Ciena previously has pointed out that carriers are not canceling network investments, but are delaying them despite constant network traffic growth and bandwidth utilization. That pattern has seemed like one reason to believe the telecom network industry could avoid a downturn reminiscent of earlier this decade--because network spending eventually should have to increase to keep pace with traffic demands. But, it seems that spending control is still a priority for the carriers.

For more:
- Light Reading has this story
- Telephony has this report

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