Kaiam lays off 310 of 338 staff at plant in Livingston, Scotland

Kaiam Corp of Newark, CA, USA (which makes optical transceivers for hyperscale data centers) announced on 24 December that 310 of the 338 workers at its manufacturing site in Livingston, Scotland were being made redundant with immediate effect, on account of lack of orders and trading losses.

This followed a warning on 21 December that staff would not receive their monthly wages on time because of cash-flow problems, and were not required for work before 3 January. While the plant is mothballed, the remaining 28 staff have been retained to help Blair Nimmo and Alistair McAlinden of KPMG, who were appointed on 22 December as joint administrators of subsidiaries Kaiam Europe Ltd and Kaiam UK Ltd while a buyer is sought for the European operation.

Kaiam acquired Gemfire, its strategic photonic lightwave circuit (PLC) supplier, in 2013, and operated an 8”-wafer silica-on-silicon line for fabricating integrated optical components in the former Gemfire’s large-scale manufacturing facility in Livingston, where it also operated 40Gb/s and 100Gb/s optical packaging lines.

“We are exploring a sale of the business and are working with Scottish Enterprise, Skills Development Scotland and West Lothian Council to provide a full range of support to the company’s employees as this process takes place,” said Nimmo. “Partnership Action for Continuing Employment (PACE), the Scottish Government’s partnership framework for responding to redundancy situations, has already mobilised,” he adds. “We are also liaising with the UK Government in relation to the timing of redundancy payments via the Insolvency Service.

According to the Herald Scotland newspaper, the Scottish Government says that it first learned of ‘financial difficulties’ on 22 November. In 2014, Scottish Enterprise gave Kaiam a £850,000 taxpayer-funded grant to relocate some of its manufacturing from China to Scotland, on condition that jobs and project assets would be in place until 2021. Kaiam’s president & CEO Bardia Pezeshki claims that those funds were consumed up by massive overheads at the plant.

Scottish Enterprise aims to recover some of that money. “Scottish Enterprise will work with the administrators to understand the potential options for the business going forward and explore all possibilities to rescue the jobs,” said the Scottish National Party’s Jamie Hepburn, a Member of the Scottish Parliament (MSP) and the Scottish Government’s Minister for Business, Fair Work and Skills.

See related items:

Kaiam initiates strategic transceiver reserve for data-center applications

Kaiam partners with Broadex for manufacturing and supply of transceiver modules in China

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