is scaling back as the troubled telecom industry continues to rot.
Sycamore said Wednesday that it will fire 35% of its staff and phase out its optical transport business to concentrate on optical switching. At the same time the company ratcheted down revenue guidance and set restructuring charges to account for the strategic shift. The move comes as telecom spending continues to drop, pushing companies that build networking gear to focus on what they do best and get out of other businesses.
"Sycamore has take then decisive action we believe necessary to successfully navigate through the current downturn in the telecommunications industry," said Dan Smith, the company's president and CEO, in a statement. "These strategic initiatives will allow Sycamore to preserve cash and better align the cost structure with current market opportunities."
The company said it now expects to report fourth-quarter revenue of $5 million to $10 million. Analysts, on average, had been expecting $11.3 million, according to Thomson Financial/First Call.
Sycamore will take a $45 million to $55 million charge to fire 235 workers, write down the value of transport-related assets and reduce the value of strategic equity investments. Before the firings, Sycamore had employed 665 workers.
The announcement, which was made after the close of regular stock trading, sent shares down in after-hours trading. Shares had closed down 13 cents at $3.25, but lately on Island were trading at $3.11. The stock has lost more than two-thirds of its value over the last year.
The Sycamore news came followed an
announcement late Tuesday by another troubled gear maker,
, which also lowered guidance.