Posted on 10/03/2001 8:52:00 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
CORNING, N.Y. -- Corning Inc., caught off-guard by a sharper-than-anticipated slowdown in the telecommunications industry, said Wednesday it expects to cut an extra 4,000 jobs on top of the 8,000 jobs it eliminated earlier this year.
Corning, the world's biggest manufacturer of optical fiber used in communications networks, said it will shut down most operations at its five optical-fiber plants in late October. It plans to increase production early next year when business conditions improve.
The company will record a charge of about $1 billion in the second half of this year, including about $350 million in the third quarter.
Projected pro-forma profits will be in the range of 2 cents to 6 cents a share in the July-to-September quarter. A year ago, Corning's third-quarter profit jumped to $254 million, or 28 cents a share, from $142 million, or 18 cents a share, in the third quarter of 1999.
Corning's global payroll peaked at 43,000 early this year. By the end of 2001, job cuts could total about 12,000, it said.
The company previously reported a sudden cooling of demand for fiber products in August, forcing about 1,000 layoffs.
"What we have seen is a further slowdown in September," Corning's chief financial officer, James B. Flaws, said in an interview. "It's tough to distinguish exactly the causes. Clearly we think some of it is related to an element of overall conservatism right now in terms of investment on businesses' parts coming out of the tragic events of Sept. 11."
The company declined to say how many employees would be temporarily idled at its fiber plants in Bloomington and Concord, N.C.; Deeside, Wales; Neustadt, Germany; and Victoria, Australia.
"I anticipate we'll start ramping up production again in January," Flaws said.
Most of the company's previous job cuts came in the photonic technologies division, which makes components designed to boost or redirect transmission of data traveling long distances at high speeds through fiber-optic lines.
Corning draws about three-quarters of its revenue from optical networking products.
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