Sycamore will focus its business on optical switching products and integrate transport and transmission capabilities into its switches instead of selling stand-alone equipment, the company said in a statement. The downturn in investment by telecommunication carriers forced Sycamore to make the move.
The optical network equipment industry was hit hard beginning in late 2000 after carriers overbuilt networks for demand that has not yet been realised.
Sycamore will halt development of its SN 8000 and SN 10000 standalone transport systems and focus its resources on the SN 3000 and SN 16000 series of optical switches.
The job cuts will represent a workforce reduction of about 35% and the company expects to complete them by the end of this week, according to spokeswoman Lucia Graziano.
The moves will result in costs ranging from $45m to $55m but will result in quarterly cost savings of $15m to $18m starting from Sycamore's fiscal first quarter of 2003, which begins Aug. 1, Graziano said.
Sycamore has also announced a partnership with Siemens Information and Communications Networks, a unit of Munich-based industrial giant Siemens, in which Siemens will resell the company's optical switches around the world.
The companies also will work to integrate products and network management, Sycamore said. The companies will work together to market Sycamore's SN 16000 switch and integrate it with Siemens' TransXpress Infinity long-haul transmission gear, SDH (Synchronous Digital Hierarchy) systems and network management systems worldwide. The agreement is not exclusive.