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By Yuki Noguchi
Washington Post Staff Writer
Thursday, September 18, 2003; Page E05
Corvis Corp. will lay off employees for the ninth time in three years, cutting an additional 200 jobs and effectively eliminating most of the fiber-optics company's original workforce.
The Columbia company will end this year with 1,200 employees, most of whom will work for Broadwing Communications, a telecommunications services company that was purchased by Corvis earlier this year. Corvis's original business of developing and manufacturing fiber-optics equipment for long-distance telecommunications networks has 180 employees, down from 1,700 three years ago.
Broadwing will generate much of Corvis's revenue as well.
"It is a sea change in terms of the focus of the company," said Hasan Imam, an analyst for Thomas Weisel Partners LLC.
Corvis has been reducing the size of its workforce to reflect the lack of demand for its products. Corvis was recently overlooked for a contract to help expand federal government telecommunications networks, a deal that could have meant at least $150 million in revenue over the life of the contract, Imam said. Analysts said that contract, which has not been officially awarded, will probably go to rival Ciena Corp.
"That was the straw that broke the camel's back," Imam said of Corvis losing the contract. "At the end of the day, they had to lay off anyway," because the company is getting only $5 million in revenue a year but maintained the workforce of a $300-million-a-year company, he said.
Ciena spokesman Denny Bilter said the Linthicum, Md.-based company has been informed that the government will begin testing its products for use in the expansion contract but that it hasn't officially won the contract yet.
The restructuring will save Corvis $30 million to $40 million a year and will allow the company to conserve more cash, said Andrew Backman, a Corvis spokesman. It will have $275 million to $300 million in cash and cash equivalents at the end of the year.
Corvis officials said the cuts were part of the company's continuing efforts to adjust to the decimated telecommunications equipment market.
Backman declined to comment on the government telecommunications contract.
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