Ciena Cutting Deeper

Ciena (CIEN) is preparing a deep round of job cuts for the second time in a month.

The Linthicum, Md., networking shop is cutting 300 jobs from across its operations, say people familiar with the plan. The 25% cutback comes just four weeks after Ciena closed its San Jose facility.

The layoff plans show that Ciena continues to struggle in all its sales efforts. The company's new gear has proved a tough sell with tightfisted telco customers, and its once-hot CoreDirector gear isn't flying off the shelves either.

The latest round of layoffs will target workers from across Ciena's operations, including low-level executives, administrative staff, engineers and customer support employees. Entire sales teams on some accounts have been notified or will soon receive pink slips, according to people close to the situation.

The 300 new cuts come on top of the 425 jobs Ciena slashed with last month's closing of its ONI unit. The back-to-back cuts suggest that Ciena is seeing few bright sales prospects ahead, and show that the company's bold invest-through-the-gloom strategy has backfired, say analysts and investors.

Ciena representatives declined to comment. Ciena CEO Gary Smith was in a board meeting and unable to be reached, said an assistant.

With demand for Ciena's once-coveted optical networking gear all but dried up, Smith and chief strategist Steve Chaddick decided over the last year to acquire smaller companies that aimed at other parts of the communications equipment market.

Ciena's varying tastes ran toward strong technology and the potential to bring in new customers. The most recent acquisitions came in February, when Ciena bought closely held Catena Networks, a maker of broadband access systems, and Internet Photonics, which makes optical Ethernet transport and switching solutions for cable companies and businesses.

"The problem is that Ciena has been a pure play in optical, and that's were the industry's biggest weaknesses are," says Legg Mason's Timm Bechter. "And now, even the small players they have acquired are having a hard time getting traction."