DragonWave to lay off 60% of Israeli workforce

Canadian company DragonWave is restructuring its Israeli R&D center. The company, which bought Israeli company Axerra Networks a year ago, is to lay off a substantial proportion of its workers in Israel in the next few days. Sources inform "Globes" that some 30 people will lose their jobs, representing about 60% of the workforce.

Hearings were held for the workers today at the R&D center at Ramat Hahayal in Tel Aviv. It appears that the center will continue to operate.

DragonWave provides high-capacity packet microwave solutions for IP networks. The company paid $9.5 million cash for Axerra. The value of the transaction was due to rise to up to $15.5 million if Axerra met certain milestones within 16 months of being acquired, but things did not work out as expected.

DragonWave reported a fall in sales of more than 50% in the second quarter of this year, and lost $12 million in the first half. According to the company's financial statements, Axerra contributed only about $1 million in the last quarter.

The reason for the layoffs is not necessarily connected to the company's weak performance, but to a strategic move recently carried out by DragonWave when it bought the wireless infrastructures equipment activity of Nokia-Siemens for $20 million. DragonWave's share price has fallen by some 60% in the past year, to give the company a current market cap of $130 million.

Published by Globes [online], Israel business news - www.globes-online.com - on December 18, 2011

DragonWave to lay off 60% of Israeli workforce

The Canadian company bought Israel's Axerra Networks a year ago, but is now drastically downsizing it.