Sources inform ''Globes'' that Comverse Technology's (Nasdaq: CMVT) management has decided to lay off 10% of the staff in each of the company's subsidiaries: Comverse (formerly Comverse Network Systems), Comverse Infosys, Star*Home, and probably Ulticom (Nasdaq: ULCM). The official announcement will be sent to the employees after the Jewish holidays end in October.
Official figures provided by Comverse show the company axed 400 employees in its last wave of lay-offs, leaving it with 5,400 employees. Rumors claim Comverse will lay off 500 more people in the current wave of layoffs.
At the end of June, "Globes" first revealed that Comverse was about to lay off 400-500 employees over the summer. The company denied the report. Afterwards, the company sent a letter to employees stating there was no plan to fire staff. However, Comverse had no choice in light of the situation in the communications and capital markets, and the company joined the long list of firms announcing waves of lay-offs.
In the past year, Comverse Technology cancelled $20 million worth of projects, leaving 400-500 people without work in Comverse alone. As a result, industry sources believed four months ago that the company would have no alternative, and would be forced to cut its staff.
Last week, Comverse won a tender from Verizon Communications (NYSE: VZ) (the merged company of Bell Atlantic and GTE) to supply its Trilogue voice mailboxes. Trilogue constitutes 75% of Comverse's revenue. The deal will total $200-250 million in 2001-03.
Comverse said in response, "The company does not comment on rumors."
Published by Israel's Business Arena on 26 August 2001