Tellabs warns, cuts jobs
Telecom gear maker Tellabs Inc. has put analysts on notice, warning that it will fall below expectations and post a third-quarter loss. Along with the warning, the company said it will eliminate 14.5 percent of its work force.
Tellabs' North American customers continue to tighten their belts, and as a result, the company expects sales to fall between 15 percent and 25 percent lower than the second quarter. Tellabs posted second-quarter sales of $344.6 million. Analysts on average were calling for sales to be break-even in Q3, according to Thomson First Call.
The company plans to nix 800 jobs, 400 of which will be cut in the United States. A manufacturing facility in Shannon, Ireland also will be shuttered. By 2003, Tellabs expects to generate $80 million in annualized operating expenses. In April, the company cut 1,200 positions.
"As customers spend less, we must take these painful steps to reduce expenses and position Tellabs for a future return to growth and profitability," Tellabs CEO Michael Birck said in a statement. The company will take a one-time $70 million restructuring charge in the third quarter related to these latest cuts. Prior to today's announcement, the company has reduced its employee roster by 3,700.
Tellabs' stock was taking it on the chin. The company's shares were down 60 cents, or 10 percent, to $5.16 as of 11:22 a.m. EDT.