Apr 18, 2002 Naperville, IL
Tellabs Inc. is reducing its work force by about 1,200, shutting a manufacturing facility and consolidating other locations because of a decline in customer demand.
The telecom equipment company will complete the layoffs, which represent about 18 percent of its work force, by the end of the year and the Ronkonkoma, N.Y., manufacturing plant will close in June, Tellabs spokeswoman Jean Medina said Wednesday.
"Anytime you need to affect people's jobs, it's a very painful thing to do but this reflects what's happening in our industry and what's happening with our customers," Medina said. "We're trying to take the right steps to ensure that we can return to growth."
The Naperville-based company said about 950 layoffs will be in the United States, including 104 from Ronkonkoma, N.Y. and about 500 from Naperville, Bolingbrook and Lisle in Illinois. About 250 job cuts will be overseas, at locations yet to be determined, the company said.
Tellabs will take a second-quarter charge of $130 million related to the restructuring effort. It also will record a charge of $110 million for excess inventory and purchase commitments.
The restructuring effort is expected to produce savings of $100 million for the rest of 2002, effectively cutting Tellabs' operating costs to $685 million from $785 million for all of 2002.
Shares of Tellabs were down 14 cents at $9.60 Wednesday afternoon on the Nasdaq Stock Market.
