DragonWave Inc. CEO Peter Allen in Ottawa May 7, 2010.Blair Gable/The Globe and Mail
Telecommunications equipment firm DragonWave Inc. is cutting 68 jobs, mostly in Ottawa, but also in Israel, following its recently closed deal with Nokia Siemens Networks.
The cuts came as Ottawa-based DragonWave said it will add new regional offices in Mexico and Brazil and increase staff in certain other locations to support its acquisition of the Nokia Siemens Networks microwave transport business.
The company has also established a distribution operation in the Netherlands to complement its existing logistics capabilities in Ottawa and Malaysia.
DragonWave did not say how many new jobs were being created.
"In all cases they will start small and then we'll build up over time," chief financial officer Russell Frederick said.
"At this point it is only a few people in each place, but we'll grow over time."
The company employed 258 people before the cuts were announced on Monday.
DragonWave said it expects a $800,000 (U.S.) restructuring charge in the first quarter of its 2013 financial year related to the cuts and a one-time cash usage in the second quarter of approximately $1.5-million.
It expects the cuts will reduce annual operating expenses by $6-million.
DragonWave sells high-capacity microwave systems that transmit broadband voice, video and data for mobile networks.
Last week, DragonWave closed the acquisition of Nokia Siemens Networks' microwave transport business and product line, including its support business.
The company has also become a preferred, strategic supplier to Nokia Siemens Networks of packet microwave and related products.
Frederick said the Nokia Siemens Networks deal changes the company's product portfolio and gives it new operations in Italy, and China.
"We also now have a completely different product portfolio because our portfolio has been expanded now to include the products in the acquisition," he said.
Frederick explained the new offices in Mexico and Brazil will offer sales and support services for the new products as well as DragonWave's existing products.
The cuts Monday follow a move by DragonWave in December to cut 38 jobs from its Israeli operations, which the company acquired in 2010 with its purchase of U.S.-based Axerra Networks Inc.
Shares in DragonWave were down six cents at $3.17 (Cdn.) on the Toronto Stock Exchange on Monday afternoon.
The company lost $33.5-million or 94 cents per diluted share for the financial year ended Feb. 29 compared with profit of $2-million or five cents per diluted share a year earlier. Revenue totalled $45.7-million, down from $118-million.