Ciena to cut 55 distribution and product engineering employees

Ciena is laying off 55 employees, mainly in its distribution and product engineering departments as it outsources some of these functions.

Set to take effect at the end of May, Maryland's Department of Labor, Licensing and Regulation said it would provide outplacement services to the affected employees, according to a Baltimore Business Journal report.

Spokeswoman Nicole Anderson said that employees in the vendor's supply chain team in Maryland will leave over a 90-day period in May, August and October.

"We understand that this is difficult news," Anderson said. "Although impacted employees won't begin leaving Ciena for 90 days, we hope that by announcing our decision now, they will have more time to plan."

The vendor's move is about a broader effort to improve the efficiency of its supply chain. 

These layoffs come after Ciena reported promising fiscal fourth-quarter 2014 results and an upbeat outlook for 2015. During the quarter, the vendor reported $591 million in revenue, up from $583.4 million from the same period a year ago.

"As we continue to expand Ciena's role and reach, we are well positioned to drive continued growth and increased profitability in 2015," said Gary Smith, president and CEO of Ciena, in the earnings release.

Overall the optical industry has been going through a period of transition where service providers like AT&T (NYSE: T) and Verizon (NYSE: VZ) have been tightening the purse strings on new network builds. Optical spending dropped 5 percent year-over-year as Tier 1 telcos become cautious about spending capital on new network builds, according to Infonetics' third-quarter 2014 Optical Network Hardware report.

Although the North American market stopped being the optical market leader in Q3 2014, strong results from Ciena were offset by weaker performance of other vendors in the segment.  

Despite seeing weaker spending by traditional telcos like AT&T and Verizon on optical gear, Ciena has been making headway with a number of other emerging service providers, including Equinix and Hibernia. 

For more:
- Baltimore Business Journal has this article

Related articles:
Moody's: Wireline revenue will continue to decline, but TV, broadband will offset trend
Ciena, Avaya serve up WAN-LAN data networking solution
Optical gear spending drops 5% as traditional providers tighten spending strings

This article was updated on Jan. 20 with additional information about Ciena's revenue mix. 

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