Comverse set to fire 400 employees in October
About 400 Comverse Technology Inc. (Pink Sheets:CMVT) employees will receive dismissal notices at the beginning of October. Half of the layoffs are exected to be in Israel.
The firings will come as no surprise because employees received a letter in August from Comverse CEO Andre Dahan, saying that the company was encountering difficulties and planned cutting its workforce.
At the time Dahan wrote, "Comverse's negative cash flow together with expected revenue results in the full financial reports for previous years have brought about significant cash pressures." He then added layoffs were approaching for hundreds of employees as part of the required expenditure cuts and at the same time the company had hired US investment bank Goldman Sachs to examine various alternatives for raising capital. Dahan said that cuts in operational expenses would last 12-18 months and he admitted that "these are challenging times."
In addition to the cuts Comverse is also selling assets and only today reported it had sold its properties in Ra'anana.
The company estimates that the cuts will bring savings of $45 million, and that cash reserves will rise to $100 million by the end of 2011.
A Comverse spokesman told "Globes," "The company does not respond to speculation and will announce its plans directly to its employees in an orderly manner."
Comverse's share was up 7.21% in morning trading in New York to $5.80, giving a market cap of $1.17 billion.
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