DZS Inc. a maker of networking equipment and software has decided to outsource its manufacturing operations to an independent contractor. Hence, the tech company is laying-off 58 jobs at its Seminole manufacturing facility. The company is anticipating that the move could help in fulfilling customer demand and reduce their growing backlog.

WARN Notice

Dallas-based DZS Inc. announced the lay-off decision through a letter. The letter stated that the business conditions caused the lay-offs. Moreover, the letter further stated that the unforeseeable business circumstances was the reason due to which the company could not notify the employees well in advance. DZS Chief Legal Officer Justin Feguson issued the letter. However, the letter met the WARN Notice requirements. The WARN Act binds the  companies to provide Worker Adjustment Retraining and Notification notices when making job cuts. Furthermore, the job cuts will start from 5th December and will continue till end of the year. In addition, all the lay-offs will be permanent.

Partnership with Febirnet

The job cuts came as a result DSZ partnership with global manufacturer Fabrinet. The partnership will allow to strategically shift to a contract manufacturing model. Moreover, DZS will move its sourcing, procurement, order-fulfillment, manufacturing and return merchandise authorization activities in Seminole to Fabrinet. The sourcing of these activities will complete by the end of the year. Fabrinet president and chief operating officer Harpal Gill said that the move will help in improving the efficiency of DZS. Moreover, the move will also boost its bottom line as it produces optical, broadband and cloud computing products and software.

Future of DZS employees

“Post transaction, the DZS Seminole, Florida-based operations, supply chain and manufacturing workforce will be reduced by approximately two-thirds and the remaining team will be relocated to an appropriately sized facility.” DZS spokesperson said in an official statement. However, the company’s spokesperson did say anything about the remaining future of remaining employees. DZS estimates the 58 Seminole layoffs account for about two-thirds of its workforce there and they will relocate the remaining employees. In addition, the company will offer job placement support for rest of the workers.

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