Comverse. Planning more layoffs
Comverse considers firing 10% of workforce
In three previous rounds of layoffs, high tech company fires hundreds of employees in Israel and abroad. Last year, Comverse CEO Andre Dahan writes in letter to employees, 'We are expecting drop in our business activity'
Comverse is considering undertaking another round of layoffs following the High Holidays. The company currently employs some 4,000 employees throughout the world, 2,000 of which work in their Israel
offices. The company is currently considering cutting back by 5% to 10% in their workforce.
The layoffs are slated to reach 400 people throughout the world. The company has yet to decide on a specific number, and it remains unknown what the relative percentage of layoffs will be from the company's Israel offices.
Comverse reported that, as a matter of policy, it does not respond to speculations on the subject.
The high-tech company has already undergone three rounds of layoffs in the past year. In October, 150 employees were laid off, about half of them in Israel. In January, another 30 employees were laid off in Israel. In March, the most recent wave of layoffs, the company laid off another 100 employees in Israel and 200 abroad.
At the beginning of April, the company announced that it would stop subsidizing employee lunches in the company cafeteria and in restaurants. In addition, the gym in the company's building was closed, and Passover gift certificates were not distributed to employees. Company employees were requested to take five days of vacation by the end of August.
Following the most recent round of layoffs, Comverse CEO Andre Dahan wrote in a letter to employees, "We are dealing with the most difficult economic climate in recent decades. It is clear that 2009 will be challenging for all industries and all regions of the world. Our clients are more cautious in their spending, and we expect a drop in our business activity."
Comverse is not only suffering from the effects of the economic crisis and the weakening dollar. The company is still recovering from the back-dating scandal in which senior Comverse management is suspected of backdating their company stock options in order to make them more fruitful. Former CEO and Founder Kobi Alexander fled to the United States and ultimately found asylum in Namibia.
Comverse has not published financial reports since the scandal broke three years ago. The company recently reached an agreement with the US Securities and Exchange Commission so that the company would not be subject to penalty fines over the affair. Within the framework of their agreement, Comverse will neither confirm nor deny SEC claims against the company, but will accept upon itself a permanent injunction against future violations of stock exchange law.
