Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) has succumbed to increasing market pressure and initiated a restructuring process that will see the company focus on its packet optical products, mobile backhaul systems and Service Provider Information Technology (SPIT) capabilities.

As a result of the downsizing, about 530 staff (around 16 percent of its total headcount) will be laid off and the company will take a restructuring charge of about US$107 million. The company previously announced job cuts in July 2011. (See Tellabs Cutting 10% of Staff.)

Tellabs currently has 3,250 staff. It still has 125 jobs to cut from its previously announced reduction and will now axe a further 530. The company tells Light Reading, though, that it also plans to hire 105 new staff, which will bring its post-restructuring headcount to around 2,700.

The restructuring decision comes amid what Tellabs CEO Rob Pullen describes in the company's official announcement as "a climate of economic uncertainty." (See Maybe AT&T Won't Accelerate Capex and Tellabs Slowdown Surprises Street.)

That climate hammered the company's revenues and profits in 2011. For the full year Tellabs reported revenues of nearly $1.29 billion, down 21.7 percent compared with 2010, and a net loss of $188.4 million compared with a profit of $155.6 million the previous year.

In the fourth quarter, Tellabs generated revenues of $316.8 million, down 22.9 percent from a year earlier, and posted a net loss of $4.9 million, better than the $10.9 million the vendor lost a year earlier. Some other vendors, but not all, also found the final quarter of 2011 tough going. (See Juniper's Q4 Got Even Worse, Acme Packet Revises Forecast and Adtran Shows Its Mettle.)

For the first quarter of 2012, Tellabs expects revenues of between $260 million and $290 million, lower than the $297.7 million that financial analysts, on average, had been expecting.

Portfolio restructuring
As part of its refocus, Tellabs says it will "stop new development work on the Tellabs SmartCore 9100 LTE product, while continuing to support Tellabs SmartCore 9100 WiMax customers." That wireless core platform was acquired by Tellabs in October 2009 for $165 million. (See Tellabs Tees Up LTE EPC and Core Blimey! Tellabs Buys WiChorus.)

The portfolio focus will now be on the company's mobile backhaul and packet optical "solutions" and its Insight Analytics network performance management tool plus associated professional services. (See Orange Moldova Backhauls With Tellabs, Tellabs Smartens Up Its Routers, Tellabs Scoops Two Russian Backhaul Deals , Tellabs Could Seek Optical Redemption and Packet Optical Dips in Q3.)

Tellabs, of course, is not the only vendor to slim down and focus on areas of core competency in an effort to survive. (See NSN to Cut 17,000 Staff and NSN Unveils Its Kill List .)

— Ray Le Maistre, International Managing Editor, Light Reading

Alcatel-Lucent (NYSE: ALU), T-Mobile Hungary , Telefónica SA (NYSE: TEF) and KPN Telecom NV (NYSE: KPN) help shake us out of our post-holiday grogginess in today's roundup of EMEA telecom tidbits.

Most analysts are chalking up Juniper Networks Inc. (NYSE: JNPR)'s weak fourth quarter to political posturing by AT&T Inc. (NYSE: T). But one is saying it's the first sign of a long-term shift in router demand.

The rise of packet-optical transport systems (P-OTS) and of carrier-owned content delivery networks (CDNs) is going to dilute the need for more service-provider routers, believes ACI Research analyst Ed Zabitsky.

Juniper announced Monday afternoon that fourth-quarter earnings would be even lower than the company had warned in October due to weakness in router sales, particularly in North America. (See Juniper's Q4 Got Even Worse and Juniper's Getting Stalled on Revenues.)

Most analysts concluded that AT&T was at fault. As the T-Mobile USA deal unraveled, the carrier curbed its spending to try to "turn the equipment vendors into lobbyists," wrote analyst George Notter of Jefferies & Company Inc. in a note earlier this week.

Zabitsky sees something bigger going on, though. Since early in 2011, he's been saying that router demand, particularly core routers, is going to be in trouble.

The rise of P-OTS, for example, is a way to accommodate growth without using so many core-router ports; "router bypass" is a favorite phrase around this topic. Then you've got CDNs, which let carriers cache content locally rather than reaching across the network to get it -- call it "network bypass," if you will. Both effects will dampen the demand for routers, Zabitsky thinks.

One key point of his argument is that Juniper's T-4000 core router began shipping in the fourth quarter and doesn't seem to have kicked off a wave of orders. That would be unusual. "Every new major product, when it comes out, comes with huge orders from existing customers," Zabitsky says.

But Juniper's bookings in the fourth quarter were about on par with its sales -- a book-to-bill ratio of about 1.0, as the company announced Monday. The fact that Juniper didn't say the book-to-bill was greater than 1.0 means it probably wasn't, Zabitsky says, and that's an indication that sales aren't growing in the immediate term.

Even with router revenues down, the T-4000 should have had an impact on Juniper's bookings, he says. To him, it all means that core-router demand might be down inherently.

Whether Zabitsky is right probably won't be settled when Juniper announces earnings on Jan. 26. (And because it's in that pre-earnings zone, Juniper declined to comment for this story.)

Most analysts expect a pretty big 2012 from Juniper. It's got four new product lines to ship -- the T-4000, the PTX, the QFabric super-data-center platform and the MobileNext evolved packet core. Analysts seem a little less certain about MobileNext, but they've been pretty jazzed about the other three.

Here's some more about Juniper's troublesome quarter:

• Juniper's Q4 Got Even Worse
• Vendors' Q3/Q4 Earnings Could Suffer
• Juniper's Getting Stalled on Revenues

— Craig Matsumoto, West Coast Editor, Light Reading

There's speculation afoot that Huawei is setting up a succession strategy, following the release of a year-end message from CEO Ren Zhengfei to the company's employees.

The Wall Street Journal reported Tuesday, and Reuters on Wednesday, that the message describes executives taking turns running the company's day-to-day operations. The role sounds a lot like that of a chief operating officer but with some CEO duties added.

This structure replaces the Executive Management Team (EMT) that Huawei created some years ago, Reuters reported Wednesday. The EMT was a bench of eight executives operating behind Ren, with the executives taking turns chairing the EMT for six months at a time, the Journal quotes Ren's memos as saying.

Huawei ended the EMT this year but has continued the rotation, with the executives taking turn as "acting CEOs." That's how Ren phrased it, according to Reuters's translation of his memo.

Ren's note also discloses two cancer surgeries he underwent years ago, according to the news reports. So, while there's no indication Ren's health is anything but good, both news reports consider the possiblity that Huawei is starting to think about a succession plan.

Lack of an obvious successor was one reason why the EMT was created in the first place. Huawei once hired some U.S. consultants who "found it inconceivable" that Huawei had no succession structure, the Journal quotes Ren's memo as saying.

News of the memo comes as Huawei pushes ahead with its new enterprise-focused growth strategy and continues its efforts to become a trusted supplier of technology in the U.S. market. (See Huawei, ZTE Probed by Intelligence Agency, Huawei's Enterprise Vision Gets Cloudy, Huawei's Open Letter to the US, Huawei Aims for $100B Annual Revenues and 2011 Top Ten: Huawei Mini-Dramas.)

— Craig Matsumoto, West Coast Editor, Light Reading