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Tellabs Cutting its Workforce

In an effort to shore up operating expenses, telecom equipment manufacturer Tellabs said it would reduce its workforce by 1,000 people and close two facilities.

In a statement, Tellabs said it plans to lay off 950 employees, while 50 workers have voluntarily accepted the company's early retirement offer.

Tellabs also plans to close a manufacturing facility in Drogheda, Ireland, and consolidate that work into other manufacturing facilities in Shannon, Ireland, and Espoo, Finland. The Lisle, Ill.-based firm also will discontinue plans to open an office building in Chelmsford, Mass.

These steps are designed to meet Tellabs' target of a further 5% reduction in operating expenses by the fourth quarter of 2001, officials said. In total, these and earlier actions will reduce operating expenses by about $120 million on an annualized basis.

To pay for these actions, Tellabs said it expects to take a one-time restructuring charge of about $50 million against third-quarter 2001 earnings.

"As customers continue to reduce capital spending, we have less work for employees and must take difficult steps to preserve Tellabs' long-term health," said Richard C. Notebaert, president and chief executive officer of Tellabs, in a statement.