Posted on: Thursday, August 23, 2001

Tellabs cutting 1,000 jobs

Associated Press

LISLE, Ill. — Telecommunications equipment maker Tellabs Inc. is cutting 1,000 jobs in the United States and Europe and plans to close a manufacturing plant in Ireland because of continued weak sales.

The job cuts, announced yesterday, represent nearly 12 percent of its worldwide work force of 8,400 people.

About 700 of the job cuts were in the United States, including about 350 at the company's Bolingbrook, Ill., manufacturing plant and Lisle, Ill., headquarters, spokeswoman Jean Medina said. Those cuts were effective immediately.

Another 156 jobs will be cut when the company closes its plant in Drogheda, Ireland, by the end of the year and consolidates the work into plants in Shannon, Ireland, and Espoo, Finland. Fifty-five workers from Drogheda will be transferred to Shannon, Medina said. The remaining layoffs will be at other plants in Europe, and 50 jobs were eliminated through early retirement, she said.

Tellabs also has canceled plans to open an office building in Chelmsford, Mass.

Tellabs — which designs and builds optical networking, broadband access and switching equipment — is among a number of telecommunications companies scrambling to cope with a dramatic falloff in orders in the weakened economic environment.

"As customers continue to reduce capital spending, we have less work for employees and must take difficult steps to preserve Tellabs' long-term health," president and chief executive Richard C. Notebaert said.

The moves are part of an effort to reduce operating expenses 5 percent by the fourth quarter of 2001, officials said. Combined with earlier actions, the company expects to reduce its operating expenses by about $120 million, officials said.

Tellabs also expects to take a one-time restructuring charge of about $50 million against third-quarter 2001 earnings.