Agere Slashes Another 4,000 Jobs
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Optical components maker Agere Systems is continuing to feel the pain of a sharp downturn in the semiconductor industry, a pain that is shared with its troubled parent Lucent Technologies.
Apparently deciding that the 2,000 layoffs it made in April were not enough to stem the tide, Agere Friday said it would slash its workforce by another 4,000 employees, nearly 25 percent, in order to cut costs.
The firm is also seeking a buyer for its chip fab plant in Madrid, and plans to discontinue operations there by the end of the year. In addition, the latest round of job cuts will allow the company to consolidate a number of its satellite manufacturing sites and corporate offices.
The company said it expects to take up to $900 million in charges over this restructuring, about $725 million of which will be recorded in the company's third quarter, which ends in June. Agere said it anticipates $520 million in annual pretax savings due to the restructuring.
As a result, Agere also lowered its third-quarter guidance, saying it expects a pro forma loss, excluding amortization and charges, of eight cents a share on revenue of about $920 million. In April, shortly after Lucent began to spin the company off, Agere projected $950 million to $1 billion in revenue.
Lucent, which holds a 58 percent stake in Agere, still plans to complete the spinoff, but it must raise $2 billion by Sept. 30 to meet the conditions of a $4 billion line of credit issued by banks. But that may be a tall order, Lucent has its own troubles to deal with. Lucent was recently in talks to be acquired by France's Alcatel, but those talks fell apart soon after word of a possible merger first surfaced.