Ynet, the website of the Hebrew daily “Yediot Ahronot”, reports that Chromatis managers, lead by CEO Orni Petruschka, convened the company’s employees early this week, and told them, “the company is fighting for its life”. Ynet also reports that the employees were informed that no lay-offs were expected, but that benefits, such as paid leave, would be cut.
Chromatis declined to respond to the report yesterday.
“Lucent (NYSE: LU) has no plans to lay off even one Chromatis employee. Chromatis’s product line is crucial for Lucent, and it is doing everything to support the company,” Menashe Ezra, head of Lucent's Waveaccess business, told “Globes” in February. Ezra claimed that Lucent CEO Henry Schacht had stated this to senior Lucent executives two weeks previously, folowing an announcement about restructuring and the dismissal of 16,000 employees. Menashe said the list of lay-offs was not yet known. “The lay-offs will be of low echelon staff in administration, sales and marketing. The number of development staff among the lay-offs will be very small,” he said.
Lucent’s acquisition of Chromatis was the largest acquisition ever of an Israeli company. The $4.7 billion price, paid in shares, contracted due to the sharp fall in Lucent’s share price. Nevertheless, the shrunken value still constitutes an unprecedented price for a start-up, especially an Israeli one, that has no real revenue.
Published by Israel's Business Arena on 24 May 2001