Orckit Communications to lay off quarter of staff
Company seeks to streamline operations and cut costs by $6 million a year.
Orckit Communications is firing a quarter of its employees in an effort to cut costs by $6 million a year, the technology maker said late last week.
Forty people will lose their jobs. Orckit, which is negotiating to reschedule debt to bondholders in the face of a $4 million shareholder equity deficit (surplus liabilities over assets) currently has a workforce of about 150.
Orckit stock plunged 9% on Thursday on the Tel Aviv Stock Exchange before recovering and closing 1.3% lower at 77 agorot. The stock has lost about 80% of its value since the beginning of the year. The company started Sunday trading on the TASE at a shrunken market cap of NIS 23.6 million.
In June, Orckit was relegated from the Nasdaq main market to over-the-counter trading, the fief off smallcap companies, due to noncompliance with the exchange's minimum stockholders' equity requirement. Though given time to rectify the situation, Orckit explained at the time that it couldn't in time. It has appealed the move to the pink sheets.
In other developments at Orckit, the firm announced that Uri Shalom will be stepping down as chief financial officer to head the company's business development operations. The CFO's responsibilities will be assumed by Orckit's president, Yitzhak Tamir.