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Avanex swings the axe

Despite the prevailing gloom in the financial sector, vendors exhibiting at the European Conference on Optical Communications (ECOC) were generally upbeat, with one notable exception — Avanex.

Well, a possible reason for the glum demeanour of the employees on its booth just came to light. According to an 8K form filed last week Avanex plans to lay off about 8% of its work force, or 47 employees by the end of this month. The company also plans to close its Melbourne, Florida facility and transfer the product lines, inventory, and fixed assets to its France or China offices. What’s more, the executive officers have voluntarily agreed to a 10% reduction in their salaries beginning October 2008.

Avanex seems to be tightening its belt in anticipation of reduced sales in the later part of this year. Although the company posted 5% sequential growth for Q408, which ended on 30 June, it issued guidance for a substantial sequential revenue decline for the following quarter. The company has yet to find a permanent replacement for former CEO Jo Major, who was axed in August, and it’s stock has reached an all-time low.

Posted by Pauline Rigby on October 7, 2008 10:12 AM | Permalink