Corning Cuts 1000 Photonic Division Jobs, Closes Three Plants
📅 - Corning Inc. (corningfiber.com), the world's largest fiber-optic cable maker, yesterday announced a plan to cut 1000 jobs, close three plants, and take charges of approximately $5.1 billion, in response to severe and unprecedented slowdowns in the photonic components industry.
"With the dramatic reduction of infrastructure spending across the telecommunications industry, and our expectation that this market downturn could last 12 to 18 months, we are taking decisive action to lower costs and improve the future profitability of our Photonic Technologies business,'' said John Loose, president and chief executive officer.
The business had revenues of $1 billion in 2000. Loose said, "Our Photonic Technologies business grew five percent to 100 percent per year for the past three years, and we originally anticipated similar growth again this year. As a result, we added significant capacity and fixed costs to meet expected market demand that has not materialized. We now expect sales this year in the range of $600 million to $700 million for this business, with significantly lower sales of optical amplifiers and other photonic components."
Including today's announcement, 3,500 Photonic Technologies jobs will have been eliminated since the beginning of the year. This will bring Corning's total cuts this year to 5,900 positions, or about 15 percent of its' total global workforce of approximately 40,000. Corning is considering more layoffs in later months.
Along with its manufacturing facility closures, Corning expects to realize pre-tax savings of approximately $150 million.
Corning also announced that its second quarter results will include a pre-tax charge of approximately $300 million to write-off excess and obsolete inventory, primarily due to significantly reduced customer orders in its Photonic Technologies business.
"We deeply regret these unavoidable actions," Loose said. "However, it is important for our shareholders that we improve the profitability of our photonics business.''
"With the dramatic reduction of infrastructure spending across the telecommunications industry, and our expectation that this market downturn could last 12 to 18 months, we are taking decisive action to lower costs and improve the future profitability of our Photonic Technologies business,'' said John Loose, president and chief executive officer.
The business had revenues of $1 billion in 2000. Loose said, "Our Photonic Technologies business grew five percent to 100 percent per year for the past three years, and we originally anticipated similar growth again this year. As a result, we added significant capacity and fixed costs to meet expected market demand that has not materialized. We now expect sales this year in the range of $600 million to $700 million for this business, with significantly lower sales of optical amplifiers and other photonic components."
Including today's announcement, 3,500 Photonic Technologies jobs will have been eliminated since the beginning of the year. This will bring Corning's total cuts this year to 5,900 positions, or about 15 percent of its' total global workforce of approximately 40,000. Corning is considering more layoffs in later months.
Along with its manufacturing facility closures, Corning expects to realize pre-tax savings of approximately $150 million.
Corning also announced that its second quarter results will include a pre-tax charge of approximately $300 million to write-off excess and obsolete inventory, primarily due to significantly reduced customer orders in its Photonic Technologies business.
"We deeply regret these unavoidable actions," Loose said. "However, it is important for our shareholders that we improve the profitability of our photonics business.''
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