Clarent lays off 10%, modifies structure

(Telephony) Softswitch and IP equipment provider Clarent announced that it is cutting 10% of its staff and combining two of its units as part of an organizational restructuring.

The layoffs, which affect about 90 regular employees and 20 contract and temporary workers, are occurring in all areas of the company. Clarent expects to take a $20 million one-time restructuring charge in the second quarter relating to the reduction in workforce, assets and facilities.

Clarent also announced that its enterprise business would now operate under the aegis of its local access business unit. Simon Wong, Clarent’s chief financial officer, said the combination is being created because, “there are marketing synergies that can be shared by both groups.”

The company said in a statement that the staff cut and the reorganization are “designed to achieve cost savings and operating efficiencies in accord with previously stated goals.”

The previously stated goal referred to, said Wong, is the reduction of operating expenses to about 65% of the company’s total revenue by the end of the year. At the end of the first quarter, that ratio was at about 78%.

Despite the changes in headcount and structure, though, the company is neither updating nor re-affirming this or any parts of its guidance at this time, said Wong.