Ciena's ( CIEN) vision came under fire again Tuesday after the struggling networker rolled out plans to close down an optical gear operation it acquired at great cost just two years ago. Ciena says it will close the former ONI facility in San Jose, Calif., in a continuing effort to trim costs. The move will allow Ciena to slash its staff by 425 workers, or 25% of the total. The reeling network gearmaker says the move will reduce between 10% and 20% of its total costs. Ciena will move equipment design and support duties to Georgia and Maryland. The company has been rushing to reduce its budget after long trying to grow its way out of the tech sector's stupor. Shares of the Linthicum, Md., tech shop rose 6% to $5.04 immediately after the announcement. Ciena paid $900 million to acquire ONI in 2002 and saw it as a way to break into the so-called metro optical market. ONI made telecom gear designed to merge synchronous optical network, or SONET, traffic onto next-generation optical networks known as wave division multiplexing, or WDM. After a period of rapid network expansion around the turn of the century, the optical industry collapsed due to overcapacity and overspending. The suppliers of optical gear, like Ciena, Nortel ( NT) and Lucent ( LU), were all forced to jettison much of their optical operations.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.