Comverse lays off 450 in Israel, 750 worldwide

Rumors are circulating in the company that 1,200 will be fired. Management stands by its previous announcement that only 600 will be laid off.

”Globes” has learned that the number of employees laid off by Comverse (Nasdaq: CMVT) already totals 450 in Israel alone. The company announced several weeks ago that it planned to dismiss only 200 workers in Israel and another 200 overseas.

Comverse sources said that the company blocked 300 people from accessing its internal network this month, while 150 were blocked in April. Blocking an ex-worker's access to the network is the first step undertaken by Comverse when it fires an employee, to prevent possible damage to the company’s database, among other reasons.

Company sources estimated the number of overseas layoffs would soon reach 300, bringing the overall total to 750 in the near future. Rumors abounded in the company that management plans to reduce its workforce by 20% in the long run, which would involve 1,200 layoffs.

At the end of April, Comverse announced plans to fire 6% of its payroll, amounting to 400 workers, half in Israel and half in its overseas branches around the world. Comverse is a world leader in communications services, such as voice mailboxes and cellular services.

Comverse chairman Kobi Alexander has since said that the macroeconomic climate has deteriorated, forcing Comverse to adapt its workforce and expenses composition accordingly, in order to preserve its current growth rates. Alexander emphasized that the cutbacks would not affect the company’s development, quality assurance, and service departments. It has been learned, however, that a small number of employees have also been laid off in these departments.

A Comverse spokesman denied the report. It should be kept in mind that the spokesman also denied the company’s plan to fire workers only a few days before the official announcement of the layoffs.

Published by Israel's Business Arena on May 14, 2001

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