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Ciena Consolidates Facilities

Ciena® Corporation (Nasdaq: CIEN), the network specialist, today announced plans to close its Shrewsbury, New Jersey facility not later than April 29, 2006, the last day of Ciena’s second fiscal quarter. The facility currently houses 114 employees.

The closure is expected to result in a headcount reduction of 62 employees. Ciena expects to offer relocation to 27 employees, the majority whom are engineering employees. The planned action is expected to have no effect on current product development efforts. Ongoing development work previously conducted at the facility will be consolidated on a functional basis with related efforts already in progress at other Ciena locations. Sales and support activities currently conducted out of the facility will be moved to alternate remote locations. Operational responsibilities based out of New Jersey will transition to the Company’s headquarters in Maryland.

“For more than a year now, we have been moving away from product-based or location-specific R&D to a model of ‘core competency-based’ R&D that enables us to leverage our engineering resources across a wider range of product and solutions sets, independent of geographic location,” said Gary Smith, Ciena’s president and CEO. “Closing a facility is a difficult decision that affects employees, their families and the surrounding community, but the cost savings that will result make it a necessary step in Ciena’s  process toward profitability and earnings growth.”

Ciena estimates that the actions announced today will generate between $7 to $8 million in annualized cost savings, including approximately $6 to $7 million at the ongoing operating expense level, prior to restructuring-related or other non-operating charges. The Company expects that the majority of the cost savings will be in place by the end of its second fiscal quarter, 2006.

Ciena expects to record restructuring charges ranging from approximately $3.8 million to $8.1 million associated with this action. All of these restructuring charges are expected to result in future cash expenditures by Ciena. Restructuring charges include severance, relocation and other employee costs ranging from approximately $2.9 million to $7.2 million, depending upon the number of employees that accept relocation offers. Restructuring charges associated with severance are expected to be paid and incurred primarily during the second fiscal quarter, and to a lesser extent in the third and fourth fiscal quarters of 2006. Any restructuring charges attributable to relocation are expected to be incurred over the remainder of fiscal 2006, depending upon, among other things, the number of employees accepting relocation offers and the timing and amount of any relocation payments to employees. Restructuring charges also include approximately $0.9 million in facilities costs, primarily associated with remaining lease payments for the facility. This charge is expected to be incurred during Ciena’s second fiscal quarter and the resulting cash expenditures will be incurred as the remaining lease obligations are paid during Ciena’s second and third fiscal quarters.

In addition to development activities based at its headquarters in Linthicum, Maryland, Ciena has development facilities in Acton, Massachusetts; Alpharetta, Georgia; Kanata, Ontario and has recently launched a development center in Gurgaon, India. At the end of its first fiscal quarter ending January 31, 2006, Ciena employed 1,442 worldwide.