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Comverse begins laying off 5% of employees

פברואר 8, 2010. Globes: Ron Steinblatt

Comverse Technology Inc. (Pink Sheets: CMVT) today began its layoffs. Sources inform ''Globes'' that the company plans to fire 225 employees; 5% of its workforce worldwide.
The layoffs come four days after Comverse published its first financial report in four years.

Comverse has 4,500 employees worldwide, including 2,000-2,200 in Israel. The sources said that the company waited until Monday - the start of the work week overseas - to begin the layoffs.

In a letter to employees earlier this month - the start of Comverse's fiscal year - CEO Andre Dahan said, " Throughout 2009, I shared with you the challenges we faced due to the very difficult global economic environment, its impact on the wireless industry, and our expectation that business activity for the year would decline at our Comverse segment."

Dahan pointed to the improvement in Comverse's backlog in the fourth quarter, saying, "Back in September, I observed that although our business activity had not yet stabilized, there were a few good reasons why we were hopeful that some recovery would materialize toward year-end. Customer spending patterns and plans appear to have stabilized. And we are seeing more positive signs in our business as well. With our bookings improving sequentially in the fourth quarter, we hope this momentum will carry over into 2010. Currently, our internal forecast is pointing to a return to modest bookings growth in fiscal 2010 compared to fiscal 2009."

Nonetheless, Dahan cut to the chase, saying, "At the same time, we must better align our operations and cost structure to the new realities of the post-recession marketplace… We have made the difficult decision to reduce our cost structure, including staffing, by approximately 5% over the next few weeks. To ensure the future success of Comverse, it is imperative that we restore our business’ ability to generate positive operating income and cash on a consistent and sustainable basis, and at a level sufficient to afford us the ability to re-invest in our most desirable opportunities."

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