Most of the layoffs will come at DragonWave’s offices in Ottawa and Israel.
Allen also said the company expects revenue for the quarter that ended Aug. 31 (the company’s second quarter of fiscal 2013) to be “above” US$40million.
According to a research note issued in July by National Bank Financial, DragonWave had said earlier it expected revenue in the quarter would be between $35 and $45 million. Still, financial analysts were expecting around $50 million.
In that research note, NBF analyst Kris Thompson noted that in a July conference call with financial analysts DragonWave management sounded “much more cautious” on the potential revenue after absorbing the NSN division. DragonWave is expecting that a year from now it will be pulling in US$75 million a quarter from the deal.
That deal sees DragonWave become the maker of microwave backhaul units that will be sold by NSN, a global provider of equipment to carriers.
However, Thompson wrote that the deal is now a risk for DragonWave because NSN’s future is in question. Things are bad enough at NSN that in November it announced it would lay off 17,000 staff world-wide.
Remember that NSN is a partnership between handset maker Nokia and Siemens. If Nokia is sold, Thompson wrote, then NSN might be drop-kicked at fire-sale prices and partnerships with companies like DragonWave “may be in jeopardy.”
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