September 11, 2012 / 11:43 AM / 6 years ago

DragonWave to cut more jobs in Ottawa, Israel

(Reuters) - Canadian telecom network equipment maker DragonWave Inc said it is eliminating 48 jobs as it grapples with cash burn due to its acquisition of Nokia Siemens Networks’ microwave business.

This is its second job cut in three months. DragonWave had cut 68 jobs in Ottawa and Israel in June. The job cuts announced on Monday will mainly be at its Ottawa and Israel offices, the company said.

The company expects to incur restructuring charges of about $1 million in the third quarter.

DragonWave, which uses microwave technology to move data between cellular towers and telecom networks, said last November that it would buy Nokia Siemens’ microwave technology unit and has since been trying to cut flab.

About 360 Nokia Siemens Networks employees were expected to be transferred to DragonWave, it had said.

DragonWave had about 200 employees globally before Monday’s job cut announcement, said Alan Solheim, vice president of corporate development for DragonWave.

The company, which had earlier forecast second-quarter revenue of $35 million and $45 million, now expects more than $40 million. Analysts on average are expecting $39.8 million, according to Thomson Reuters I/B/E/S.

DragonWave, which has a market value of about $89 million, expects to save about $6 million in annual operating costs as a result of the job cuts.

The company’s long years of dependence on a single customer — Clearwire Corp — had left a hole in its business. It struggled to offset a cutback in spending at Clearwire, a cash-strapped U.S. wireless provider.

DragonWave shares, which have lost more than half their value since the deal with Nokia Siemens was announced, rose as much as 3 percent to C$2.35 on the Toronto Stock Exchange on Monday morning. They were later trading flat at C$2.29.

(Reporting by Ankur Banerjee in Bangalore)

This September 10 story was refiled to say that Alan Solheim is the company spokesman, not Becky Obbema in the sixth paragraph and also to fix currency in the last paragraph

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