Sycamore pruned by downturn

Network equipment manufacturer Sycamore Networks said yesterday that it was cutting a third of its workforce and revising its fourth-quarter revenues as spending by telecoms carriers remains sluggish.

The group confirmed that it would focus on the intelligent optical switching market and will halt the development of its standalone transport systems.

Sycamore president Dan Smith said: "Sycamore has taken the decisive action we believe is necessary to successfully navigate though the current downturn in the telecoms industry.

"By concentrating Sycamore's business plan on a growing market segment in which we have proven technological differentiation, Sycamore moves forward as a more focused optical switching competitor.

"These strategic initiatives will allow Sycamore to preserve cash and better align the cost structure with current market opportunities."

As a result of the changes, Sycamore will consolidate its engineering organisation and implement a "record restructuring" of its operations in the fourth quarter.

Up to $10m of savings is anticipated to come from the laying off of approximately 235 employees.

In a separate announcement, the company is to hook up with German communications giant Siemens Information and Communications Networks.

Under the agreement, Siemens will resell Sycamore's optical switches on a global basis and the pair will work together on product and network management integration activities.