FREMONT, Calif., April 27 -- Avanex Corp. announced this week it is restructuring its operations in France, opening an operations center in Thailand and making several changes to its executive team.
Avanex, based in Fremont, Calif., makes miniature photonic components designed to increase the speed and capacity of fiber optic communications networks, in part by compensating for signal degradation during transmission. It has facilities in Erwin Park, N.Y.; Nozay, France; and San Donato, Italy;
The restructuring of the French operations will reportedly involve cutting its work force by 60 percent. Coupled with the elimination of certain licensing fees, the move is expected to reduce operating costs by up to $28 million per year when fully implemented, the company said. The cash cost of the French restructuring plan will be approximately $26 million, primarily for severance costs, and will be disbursed over the next 15 months. Avanex said this restructuring, combined with previously announced cost reductions, will result in approximately $40 million in annual cost savings.
In December 2004, Avanex announced a workforce reduction of more than 200 employees from its North American sites as part of its plan to outsource manufacturing to low-cost areas. It said the new Thailand operations center enables it to transfer further activities from all of its facilities and will centralize global manufacturing and operational overhead functions; together with the North American actions announced last December, it is expected to reduce its cost structure by $8 million to $12 million per year.
Avanex president and CEO Jo Major was elected chairman of the board, succeeding Syrus P. Madavi, who has resigned as executive chairman for personal reasons. The company also appointed Greg Dougherty to its board of directors, effective immediately. Dougherty is a director and acting CEO of Picarro, a startup focused on developing lasers and optical instruments. Prior to joining Picarro, he was COO of JDS Uniphase and SDL Inc.
Rich Yonker was appointed CFO and Jing Liao was named vice president of human resources. Linda Reddick, who has served as acting CFO since November 2003, was appointed vice president, corporate controller.
Major said, "We are executing on our global restructuring plan to streamline our business by consolidating operations into a single low-cost location. The plans to transfer manufacturing have been designed to ensure smooth transitions for customers. Our plan to improve cost structure, coupled with increasing market visibility, positions us to generate positive cash flow from operations in the future."
For more information, visit: www.avanex.com