Ciena to Close San Jose Facility

LINTHICUM, Md., April 20 -- Ciena Corp.announced today it plans to consolidate facilities as part of its efforts to reduce ongoing operating expenses by 10 to 20 percent in fiscal year 2004. The company said it will close its San Jose, Calif., facility on Sept. 30. The San Jose closing and related actions are expected to affect approximately 425 employees, or approximately 25 percent, of Ciena's current workforce by the end of the fiscal year, the company said.

All ongoing product development and customer support activities currently based in San Jose will be consolidated on a product group or functional basis with efforts in progress at other Ciena locations. For example, San Jose-based CoreDirector-related development will be consolidated with Ciena's ongoing CoreDirector development already taking place in Alpharetta, Ga., and in Linthicum, Md.; its Online-related development will be consolidated with Online activities underway in Research Triangle Park, N.C. Ciena also operates development centers in Acton, Mass., and Kanata, Ontario.

The planned actions will occur over the course of the next several fiscal quarters and are expected to have minimal effect on current product development efforts, Ciena said.

"The decision to close a facility is especially difficult because it affects not only employees and their families, but the surrounding community as well," said Gary Smith, Ciena's president and CEOr. "Though difficult, the cost savings that will result from this consolidation make it a necessary step in the process of restoring Ciena's profitability."

Ciena said the actions announced will enable the company to meet its previously announced objective of lowering ongoing operating expenses by 10 to 20 percent during this fiscal year by generating between $60 to $70 million in annualized cost savings, including approximately $55 to $65 million at the ongoing operating expense level, prior to restructuring-related or other nonoperating charges. The company said it expects that the majority of the cost savings to be in place by the end of its fourth fiscal quarter 2004.

Ciena said today's announced reductions and associated restructuring charges will not affect its planned acquisitions of Catena Networks Inc. and Internet Photonics Inc., both of which are expected to close by the end of the third fiscal quarter.

For more information, visit: www.ciena.com