News

1 April 2009

 

Opnext cutting staffing by 10%

Optical module and component maker Opnext Inc of Eatontown, NJ, USA says that it plans to reduce its cost structure and operating expenses. Key initiatives include:

• a cut of about10% in its global workforce;
• a 10% cut in executive salaries and directors’ cash compensation;
• a 5% cut in salaries for other staff;
• the elimination of cash bonuses for fiscal 2009 and salary increases in the current fiscal year; and
• suspension of the firm’s matching contribution to the 401(k) plan.

When fully implemented by year-end, the above actions, together with R&D and SG&A (sales, general & administration) synergies and expense reductions, are expected to contribute total annualized savings of about $25m. Most of the actions will be implemented in the current quarter. The compensation-related reductions are temporary and will be re-evaluated during the second half of the current fiscal year.

For its fiscal third-quarter 2009 (to end-December 2008), Opnext reported an operating loss of $15.5m, compared to an operating profit of $0.1m last quarter and $1.8m a year ago.

“In this difficult economic environment and in order to position Opnext for future success, these actions are critical to right-size the company's fixed cost structure,” says president & CEO Gilles Bouchard. “As part of the overall effort, we also continue to manage our variable costs as we streamline our manufacturing operations and supply chain,” he adds.

“Our intent is to emerge from this downturn as a stronger company both financially and operationally, with an eye towards meeting the future needs of our customers," concludes Bouchard.

Also, effective today, Opnext’s headquarters is now located in Fremont, CA.

See related items:

Opnext’s revenues fall 12% from last quarter

Opnext completes StrataLight acquisition

Opnext’s revenues fall during lull after initial 40Gb/s deployments

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