Network equipment maker Tellabs Inc reported lower-than-expected fourth-quarter revenue, and said it will cut 530 jobs to reduce costs and take a related charge in the first quarter. Another network equipment maker, Nokia Siemens Networks, said it was talking to labor unions in Germany and Finland about cutting more than 4,000 jobs, part of a restructuring program that aims to cut nearly a quarter of its workforce.
Tellabs (Naperville, Ill., USA), which has been losing out in a market dominated by larger rivals like Cisco Systems (San Jose, Calif., USA) and Juniper Networks (Sunnyvale, Calif., USA), posted a narrower loss of 3 cents a share for the period, helped partially by better margins. On an adjusted basis, it earned 1 cent per share.
The company reported fourth-quarter revenue of $316.8 million against analysts' consensus of $315.6 million, according to Reuters. For the first quarter, it expects to report $260 million to $290 million in revenue - less than the $297.7 million expected by analysts.
As a result, Tellabs said it will stop new development on its 9100 LTE product and consolidate research and development into fewer locations. The company’s website says it currently employees around 3,300 people. This new job cut will get rid of approximately 16% of the company’s workforce.
The telecom equipment maker, which has struggled to make a profit since being set up in 2007, was formed by Nokia and Siemens in the hope of building enough scale to lead an industry dominated by Swedish company Ericsson and, increasingly, by Chinese entrants.
It has faced aggressive pricing from rivals and an economic downturn that has forced telecoms companies to cut spending.
(Reporting By Tarmo Virki and Irene Preisinger; Editing by Erica Billingham)