Agere Announces 4,000 Job Cuts, $900 Million Charge

Jun 29 2001

ALLENTOWN, Pa. - Optical components maker Agere Systems Inc. on Friday said it would dismiss an additional 4,000 employees, or about 25 percent of its work force, and expects up to $900 million in charges as it copes with a severe downturn in the semiconductor industry.

The Allentown, Pa.-based company also reduced its revenue forecast for the third-quarter to about $920 million. It previously forecast at least $950 million.

Agere said it expects a third-quarter pro forma loss of 8 cents per share, excluding charges and amortization. Including the charges, the loss is expected to be 30 cents a share. In April Agere forecast a third-quarter pro forma loss of 6 to 8 cents per share.

"We built our business to serve a growing market, which is instead deteriorating," John Dickson, Agere's chief executive, said in a statement.

The company, a former unit of Lucent Technologies Inc. that was spun off in late March, said the job cuts were in addition to the 2,000 employees dismissed in April.

Lucent itself is reported readying for an additional round of job cuts that could number in the thousands. The Murray Hill, N.J.-based telecommunications equipment maker has already announced plans to eliminate 10,000 positions.

Of Agere's $900 million in charges, about $725 million will be recorded in the company's third quarter ending in June, with the rest being taken in subsequent quarters.

Agere said it expects annual pretax savings of $520 million from the job cuts and other cost-cutting steps.

Before the April job cuts, the company had a work force of about 18,500, it said.

Shares of Agere were trading up 72 cents, or 12%, at $6.71 at mid-morning on Friday.