Sunday, December 7, 2008

Alvarion Announces 11% job Cuts

Alvarion, a leading supplier of WiMAX and wireless broadband solutions, plans to reduce its global workforce by approximately 11%, from a base of about 1000 employees. In addition, Alvarion is implementing company-wide measures including management salary reductions. The combined initiatives are expected to generate annual cost of goods and operating expense savings of about $15 million.

"We have not experienced order cancellations or push-outs so far in Q4, but we see lengthening sales cycles, and we remain cautious about the potential effect of the economic climate on WiMAX-related spending decisions as we move through next year," said Tzvika Friedman, president and CEO of Alvarion.

Mr. Friedman continued. "Therefore, our operating plan for 2009 contains twin goals of continued revenue growth from strong, well-funded operators, and a lower breakeven point to help preserve our profitability and financial flexibility if business conditions worsen. Our plan calls for lowering our non-GAAP operating profit breakeven point (which excludes stock-based compensation expense and any one-time charges) to below $70 million in revenue per quarter, based on a lower gross margin level of about 45%. Equally important, our plan also maintains our capability to grow revenues as much as 15% over 2008 without increasing fixed expenses, assuming business conditions will support such growth. We believe this plan appropriately balances both short-term uncertainties and long-term prospects."