Feature Article

December 19, 2011

Dragon Wave Inc. Cuts 38 Jobs in Israel to Save Costs

DragonWave Inc., a mobile networking equipment supplier, said it would be cutting 38 jobs from its Israeli operations in order to save $1.1 million in operating expenses each quarter. The 38 cuts include both full-time and part-time staff, with the company saying these cuts were necessary to survive.

The company said, “The staff reduction…is intended to better align the company’s global sales force with existing DragonWave resources, as well as, the planned acquisition of NSN’s microwave transport business.”

Marc Rouanne, head of Network Systems at Nokia Siemens Networks, said in a news release that this acquisition of the NSN’s microwave could do wonders for DragonWave.

“Through this strategic relationship, customers would continue to receive high-quality services and sales support from Nokia Siemens Networks, while DragonWave’s best of breed products would ensure they have access to industry leading technology,” said Rouanne.

However, it comes at a price – the loss of 38 Israelis employees. The company claims nothing operational will change. “DragonWave will continue to support R&D, customer support, finance, and operations functions in Israeli,” the Ottawa company said.

The layoffs will cost the company $900,000 in severance and other one-time charges, but Nokia’s deal could be worth up to $154 million. DragonWave will supply the tower-mounted transmitters that are key in relaying cellular signals between mobile phones and the nearest cellular tower.

DragonWave will also become responsible for all the research and development, as well as, have control over the products supplied to Nokia Siemens, while Nokia Siemens will continue to be responsible for sales and support.

Peter Allen, president and chief executive officer at DragonWave, said this expansion would change the world of technology for both companies. “The relationship is transformational, giving us the ability to serve customers who want to access an integrated solution. In addition, it provides DragonWave an expanded technology base to address those customers who wish to purchase stand-alone best-in-breed products,” said Allen.

Allen continued saying this will increase DragonWave’s impact on technology. “Our increased scale, diversity and customer footprint, coupled with significantly enhanced resources and capabilities will provide a solid foundation for faster innovation and broader market penetration.”

Edited by Carrie Schmelkin

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