Comverse Inc. fires 30 in Israel

The company is firing 120 employees out of its 4,000 global workforce.

Layoffs have resumed at Comverse Inc. (Nasdaq: CNSI), after a two-year hiatus. As part of the company's effort to become leaner and return to profitability, it is firing 3% of its global workforce of 4,000 employees. The company is firing 30 employees in Israel out of 120 employees being fired worldwide.

Comverse said in response, "Last September, Comverse notified employees and the public that it planned to cut its general and administrative expenses. The reduction in manpower will focus on this area. We are continuing our heavy investment in R&D, product development, and customer service, in order to improve operational excellence, customer satisfaction, and future growth."

Comverse Technology Inc. (Nasdaq: CMVT) spun off Comverse Inc. several months ago. Comverse Inc., run by president and CEO Philippe Tartavull, has a market cap of $650 million; Comverse Technology has a market cap of $987 million. The drop in revenue worsened in the third fiscal quarter. Revenue in the first three fiscal quarters of 2012 (February-October) totaled $494 million, 16.2% less than in the corresponding period of 2011, and the net loss widened to $31 million from $26 million.

Comverse Inc. posted $185 million revenue for its third fiscal quarter of 2012, which ends in October, 24% less than for the corresponding quarter of 2011, and it swung to a net loss of $10.6 million from a net profit of $16 million. More worrying for the company is that the drop in revenue was in its business support system (BSS) division, which is its growth engine. The division's revenue totaled $192 million in the first three fiscal quarters of 2012, 31% less than in the corresponding period of 2011. Revenue from the value-added services (VAS) division fell by 2.5% to $269 million in the first three fiscal quarters of 2012.

Comverse's cash flow from operations totaled $30.7 million for the first three fiscal quarters, and it had $248 million in cash at the end of October, with no debt.

Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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