Comverse Technologies (Nasdaq: CMVT) may fire as many as 350 people, suggests the Thomas Weisel investment bank. That would be 5% of its workforce.

On Monday, June 11, Comverse Technologies will be filing its first-quarter report for 2007. However, since the company hasn't finished restating its financials from previous years yet, let alone stock option costs, we still won't know how much it's earning.

However, it can be expected to report eroding operating income for the second quarter in a row, and Comverse Technologies is widely expected to reveal a series of efficiency measures, including layoffs.

Most of the layoffs are expected at subsidiary Comverse, which has 6,100 employees, of whom 2,900 work in Israel.

Might Comverse Technologies really fire hundreds of people? If it does, it would be a first at the company.

Comverse stock

Hints as to an impending, major reorganization surfaced during TheMarker's conversation with Andre Dahan, the new chief executive of Comverse Technologies and leader of the whole group, which includes subsidiaries Verint, Ulticom and StarHome, as well as Comverse. Dahan explicitly stated that the paramount goal right now is to improve profitability without impairing growth.

Usually that translates into cost-cutting, including through layoffs.

Comverse Technologies president Yaron Tchwella, who recently took over from Zeevi Bregman, told TheMarker last week that no explicit decision had been made to lay off employees. But, he added, if any such decision is reached, first he's going to tell the workers, and only then the press.

In net terms the company is growing, so it's hiring, Tchwella added, mainly for its billing software business.

For the fourth quarter of 2006 the company reported 24% revenue growth year over year to $415 million. But its net margin shrank to 6.4% of revenues, from 10% the year before. RBC estimated that margins at the subsidiary Comverse, which is responsible for 70% of the entire group's activity, shrank to a little as 4%.

For the year 2006, revenues at the group rose 33% to $1.59 billion.

"As a global company Comverse is committed to growth and profitability, therefore the company regularly examines its investments against the status of the market and whether it's meeting its goals.  It make adjustments in its business and organization when needed," the company commented. Adjustments can translate into narrowly focused layoffs, or hiring, or moving people from one area to another. If necessary the company will make greater layoffs, in which case the workers will be informed properly, it said.