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Tellabs Slashes 1,000 More Jobs, Closes Two Plants
The Associated Press Published: Nov 16, 2001
NAPERVILLE, Ill. (AP) - Telecommunications equipment maker Tellabs Inc. plans to cut 1,000 more jobs, or nearly 14 percent of its work force, and close two U.S. plants in the latest cost-slashing to reflect fallen industry demand. Tellabs, whose gear is used to transmit data, video and voice signals, said Friday it will close a manufacturing facility in Round Rock, Texas, and a research and development facility in Plymouth, Minn. A total of 800 U.S. jobs will be eliminated, along with 200 abroad, reducing its work force to 6,400 by early 2002.
"I'm saddened by this difficult step, but it is a necessary prelude to our long-term plan to reinvent Tellabs, renew our growth and adjust to the new realities of the communications marketplace," said Richard Notebaert, president and chief executive. "We are setting the stage for renewed growth."
The job cuts came a day after Notebaert disclosed at a conference in New York that Tellabs would reduce manufacturing and cancel a product - its Titan 6700 switch, which routed traffic across long-distance fiber-optic networks.
The announcements sent its shares soaring $1.63, or 10.6 percent, Friday afternoon to $17.08 on the Nasdaq Stock Market. The stock has nearly doubled since sinking to $8.98 last month but remains barely a quarter of its 52-week high of $68.50.
Tellabs, which moved its headquarters this fall to Naperville from the neighboring Chicago suburb of Lisle, already had eliminated 1,000 jobs this year and cut $190 million in annual expenses amid plummeting demand from slumping telephone companies, its main customers.
The company said the combined actions should reduce its quarterly operating expenses to $180 million by the first quarter of next year, 26 percent below the same period of 2001.
Tellabs expects restructuring and one-time charges of about $150 million in the fourth quarter. It lost $101.7 million on revenue of $1.73 billion in the first nine months of 2001.
Most telephone calls and Internet sessions in the United States flow through equipment from Tellabs, the leading manufacturer of gear used to manage traffic on phone networks.
Notebaert on Thursday said the reduction in manufacturing expenses and production would allow the company to boost capacity by 30 percent to meet bigger orders.
On the Net:
Tellabs site: http://www.tellabs.com
-- Anonymous, November 16, 2001