Wireless backhaul company Ceragon Networks (Nasdaq: CRNT; TASE:CRNT) is firing 200 employees, two months after acquiring Norwegian company Nera Networks for $48.5 million.
Ceragon, part of the RAD Group, currently employs about 700 people, 200 of them in Israel, while Nera has 800 employees. The cuts will enable the newly merged Ceragon to cast off duplications and also reach the profitability target it has set itself.
The company today announced the layoffs as part of a new organizational structure consisting of three solution groups, Short Haul Solutions, Long Haul Solutions and Projects & Services, which will be supported by a global sales organization.
Immediately after the acquisition, Ceragon president and CEO Ira Palti was asked if there would be cutbacks and he said, "There are synergies, and we will have to make decisions about overlapping activities, but that isn’t the name of the game here. Therefore we will be able to run forward. The acquisition will enable us to grow in market share, to boost our presence in many places in the world, and provide better solutions."
Today Palti said, "It is always difficult to lose talented people, even as a result of job redundancies. This move will enable Ceragon to achieve our objective of creating a fully-integrated global organization, consisting of 1,200 employees, strategically aligned to focus on our customer needs."
Palti added,"One of the major benefits of merging with Nera is the complementary nature of the two companies. In combining the two organizations, our challenge is to capitalize on these complementary characteristics, while also identifying sufficient synergies to reach an appropriate operating expense level for the company. During the integration, we identified the areas where Nera is adding a higher level of operating expenses - and we also have been able to identify a similar amount of additional efficiencies. Therefore, we are retaining our original target for operating expenses once the integration is completed."
Ceragon's share price fell 3.3% on the TASE today to NIS 38.11, and was down 2.5% to $10.76 in morning trading on Nasdaq, giving a market cap of $375.28 million.
Published by Globes, Israel business news - www.globes-online.com - on March 15, 2011
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