JDS shuffles the executive deck
Communications component maker JDS Uniphase announces changes among its top executive team as it continues to face a tough business environment.
Greg Dougherty will become the company's chief operating officer, and Charles Abbe, a member of JDS' board and chief operating officer of one of the company's business units, will retire.
Dougherty worked as COO of SDL before its union with JDS, and Abbe served as the chief executive of Optical Coating Laboratories before that company merged with JDS in February 2000.
The shuffling gives other former SDL top executives added responsibility. Don Scifres, the former CEO of SDL and co-chairman of JDS' board, was awarded the role of chief strategy officer in charge of the company's mergers, acquisitions and business development units, as well as the technology, human resources and legal departments.
JDS CEO Jozef Straus will take on the title of president of the company.
Epoch Partners analyst Mark Langley said the shuffling comes after some sweeping changes and challenges at JDS.
The company has merged with or acquired about 10 companies over the past two years and has seen its stock price soar to a high of $146.53 and fall to a low of $13.73 last April over the same time frame.
"It's certainly a different business environment, and it's not as much fun as it used to be," Langley said, adding that the erosion of the company's stock price and successfully integrating its acquisitions pose significant challenges for JDS.
The company announced plans to lay off 5,000 people last April, or 20 percent of its work force.
JDS makes parts for communications equipment made by companies such as Cisco Systems, Lucent Technologies and Nortel Networks. These companies are experiencing a slump because their phone service carrier customers are buying less equipment, which also pinches JDS' sales.
One potential problem, according to Langley, is JDS' acquisition strategy during the boom times. "They've been very aggressive in making acquisitions for capacity, but it's not a capacity-constrained environment anymore," he said.
JDS bought so many companies in part because it needed the extra manufacturing capability, which made sense when times were good, but the recent slow times threaten to keep the recently acquired and costly plants running at less than full throttle.
The company switched to acquiring companies for their technology as opposed to their capacity, which puts it in competition with the hundreds of start-ups in the market, Langley said.
The recent pullback in venture-capital funding may help JDS, but staying ahead of new technology still remains a priority.
"The private sector threat isn't as great as it was, but it's still out there," Langley said.