There is growing evidence that JDS Uniphase Corp. is preparing to dramatically reduce its operations in Ottawa, a move that could leave the company with only a few hundred local employees.
After months of rumours, a source familiar with the restructuring says the company's next round of job cuts will be "just unbelievable.?The cuts will essentially wind down operations in Ottawa.
Other sources have confirmed that JDS is prepared to eliminate all but its research and development presence in Ottawa.
JDS spokeswoman Lori Goulet wouldn't comment on future restructuring efforts, but she acknowledged that market conditions in the telecommunications space are forcing the fibre-optic components manufacturer to constantly revisit cost-cutting measures. "The process is ongoing and it's obviously changing as we react to the market,?says Goulet.
Details about JDS's plans for Ottawa could come this Thursday, when the company releases its first quarter financial results. On Sept. 23, JDS issued an earnings warning that said Q1 revenues will likely be five per cent lower than its previous guidance. That would put revenues for the quarter somewhere between $190 million and $200 million (all figures in U.S. dollars). Excluding costs associated with its ongoing restructuring efforts, the company expects to post a loss of six to eight cents per share.
The company has already briefed some of its Ottawa employees about job cuts that will take effect next spring. Under the plan, the company will consolidate its executive ranks in San Jose, Calif. All told, the company's local headcount could be reduced from its current level at about 1,700 to far less than 1,000 workers. At its peak, JDS employed more than 10,000 workers in Ottawa. The company is already in the process of reducing its global workforce to around 8,000 by the end of next year.
At one point in time, JDS employed 29,000 workers.
On Sept. 18, Goulet said that "under our global realignment program, the workforce may go below 8,000.?
If implemented, the JDS cuts would threaten to sever the company's deep roots in Ottawa, which stretch back to 1981 when Jozef Straus helped found the JDS Optics.
The company's downsizing plan could also be another devastating blow for the local telecom sector. Last week, Nortel Networks finally disclosed the extent of its local cuts. It confirmed its local workforce now stands at about 6,000 workers. At its peak, Nortel employed approximately 18,000 people in Ottawa.
Industry officials, such as MetroPhotonics Inc.'s chief executive David Clark, say that relations with JDS have remained relatively stable recently. However, Clark says there's a perception in industry circles that JDS has delayed cuts when industry peers like Nortel and Alcatel have moved more aggressively.
"I'm surprised. They seem to be taking a long time (to make cuts) compared to how quickly Nortel is moving,?says Clark.
One of the problems with downsizing at JDS is its plan to transfer manufacturing operations to China. Sources familiar with JDS say the transfer of manufacturing is stalled. Goulet denies the process is at a standstill, but adds the plan is "complex? and will take about nine months to implement.
"We have to ensure the quality of the product before we make the move,?she says.
JDS has already abandoned most of its local office space with only the 400,000-square-foot facility on Merivale Road remaining. It's believed all office space is up for sale or sublease, except a portion of the main campus on Merivale Road. In total, JDS occupied 736,031 square feet at its peak. Now, it only occupies about 100,000 square feet.
After months of rumours, a source familiar with the restructuring says the company's next round of job cuts will be "just unbelievable.?The cuts will essentially wind down operations in Ottawa.
Other sources have confirmed that JDS is prepared to eliminate all but its research and development presence in Ottawa.
JDS spokeswoman Lori Goulet wouldn't comment on future restructuring efforts, but she acknowledged that market conditions in the telecommunications space are forcing the fibre-optic components manufacturer to constantly revisit cost-cutting measures. "The process is ongoing and it's obviously changing as we react to the market,?says Goulet.
Details about JDS's plans for Ottawa could come this Thursday, when the company releases its first quarter financial results. On Sept. 23, JDS issued an earnings warning that said Q1 revenues will likely be five per cent lower than its previous guidance. That would put revenues for the quarter somewhere between $190 million and $200 million (all figures in U.S. dollars). Excluding costs associated with its ongoing restructuring efforts, the company expects to post a loss of six to eight cents per share.
The company has already briefed some of its Ottawa employees about job cuts that will take effect next spring. Under the plan, the company will consolidate its executive ranks in San Jose, Calif. All told, the company's local headcount could be reduced from its current level at about 1,700 to far less than 1,000 workers. At its peak, JDS employed more than 10,000 workers in Ottawa. The company is already in the process of reducing its global workforce to around 8,000 by the end of next year.
At one point in time, JDS employed 29,000 workers.
On Sept. 18, Goulet said that "under our global realignment program, the workforce may go below 8,000.?
If implemented, the JDS cuts would threaten to sever the company's deep roots in Ottawa, which stretch back to 1981 when Jozef Straus helped found the JDS Optics.
The company's downsizing plan could also be another devastating blow for the local telecom sector. Last week, Nortel Networks finally disclosed the extent of its local cuts. It confirmed its local workforce now stands at about 6,000 workers. At its peak, Nortel employed approximately 18,000 people in Ottawa.
Industry officials, such as MetroPhotonics Inc.'s chief executive David Clark, say that relations with JDS have remained relatively stable recently. However, Clark says there's a perception in industry circles that JDS has delayed cuts when industry peers like Nortel and Alcatel have moved more aggressively.
"I'm surprised. They seem to be taking a long time (to make cuts) compared to how quickly Nortel is moving,?says Clark.
One of the problems with downsizing at JDS is its plan to transfer manufacturing operations to China. Sources familiar with JDS say the transfer of manufacturing is stalled. Goulet denies the process is at a standstill, but adds the plan is "complex? and will take about nine months to implement.
"We have to ensure the quality of the product before we make the move,?she says.
JDS has already abandoned most of its local office space with only the 400,000-square-foot facility on Merivale Road remaining. It's believed all office space is up for sale or sublease, except a portion of the main campus on Merivale Road. In total, JDS occupied 736,031 square feet at its peak. Now, it only occupies about 100,000 square feet.
