Comverse CEO Andrei Dahan
Comverse to fire 500 employees globally in February
Move to be made before communications giant publishes their financial report for first time in three years. Managers in Israel asked to prepare for layoffs
Just before the communication giant publishes a financial report for the first time in three years as it goes back to being traded on NASDAQ, Comverse is going to slash 500 employees from its work force around the world, Calcalist learned.
The layoffs will be made in a number of rounds within the space of weeks, and will be spread across its business centers in Israel, the US, India, and France.
Comverse currently employs some 4,200 employees, more than 2,000 of which are in Israel. It has yet to be decided how many people will be let go from the company's research and development center in Israel. The decision to make the cuts was made by the company's management last week. The move is slated to start in February, but may be delayed until March.
Ever since the backdating scandal, Comverse has not published its financial reports other than reports on its cash flow. Currently, the company is slated to present its annual report on February 9, but delays in registering its subsidiary Verint Systems will likely delay the report's publication by a month.
Even though Comverse does not publish its stock takings, Calcalist learned that the company lost tens of millions of dollars in 2009.
Stock drops 6%
The sweeping cutbacks are expected to make Comverse operationally profitable as it returns to NASDAQ. The departure of Executive Vice President of Global Human Resources Lance Miyamoto, the 20% cut in CEO Andre Dahan's salary, and the 10% cut in company management are signs indicating the upcoming moving.
Ever since Miyamoto announced his leave about two weeks ago, the company's stock, which is traded on the American Pink Sheets, dropped by some 6%.
The last round of layoffs in Comverse was in March 2009 when 300 employees were let go, including 120 from the company's research and development center in Tel Aviv. The layoffs were made necessary by a slowdown Comverse felt in the field of voice mail and text message services as well as added-value services the company provides to cellular operators.
These areas have experienced a downward trend on the backdrop of smartphones, such the iPhone and the Blackberry, taking root in the market. These devices allow users to skip over the services previously provided by the cellular company by surfing the internet directly and downloading applications to the device. The option of sending an email instead of leaving a voice message also hurt Comverse, which is clinging to managing network traffic as a service with a large sales potential that could return some color to the company's cheeks.
Comverse reported in response: "As a public company, we cannot respond to market speculations."
