Comverse Technology Inc. (Pink Sheets: CMVT) fired 300 employees today, a third of them in Israel. The layoffs amount to 8% of the company's workforce.
The news comes after two tense weeks for Comverse employees, who knew that hundreds of layoffs were pending.
In a letter from CEO Andre Dahan to employees, a copy of which was obtained by "Globes", Dahan wrote, "The company is positioned well going into the middle of fiscal year 2009, and has succeeded in meeting a large part of the goals it set for itself in 2008, including organizational changes in the company."
In Comverse's offices today, employees were already preparing themselves for the next round of layoffs.
It is hard to refer to a mass lay off of 100 Israelis with words of relief, but it must be noted that some Comverse employees had feared much worse scenarios. When the company's intentions were made known two weeks ago, the number of layoffs were predicted to reach 500 to 700 employees. Some source predicted that more than half of the company's Israeli employees could lose their jobs.
Comverse - the inventor of the voice mailbox - is one of Israel's oldest high-tech companies.
Three years and two days ago, the company announced accounting irregularities concerning employee and executive stock option grants. Three years after the first laconic announcement, the company still has not yet overcome the backdating scandal and the accounting irregularities that it exposed.
In this period, Comverse has not published audited financial reports, and the company's shareholders still do not know its financial results.
Nearly two years ago, in April 2007, Comverse appointed Andre Dahan as president and CEO. Dahan is an Israeli expatriate with a background in the US telecommunications industry. He replaced Comverse founder and CEO Kobi Alexander, who has since fled to Namibia in an effort to avoid extradition to the US for his part in the backdating affair.
The current wave of layoffs at Comverse is the third since Dahan took over, and the second wave in recent months.
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2009
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