Tellabs to cut 225 jobs
Tellabs reported its fourth-quarter earnings today and announced it would be eliminating 225 jobs in order to save money.
Excluding some items, Tellabs’ profit fell 63 percent, to $17 million (or 4 cents per share), compared with $47 million (or 10 cents per share) in the same quarter last year. The company’s net income was down from $29 million last year to $6 million.
To improve profitability, Tellabs is implementing a plan to increase gross profit margins and reduce operating expenses. Together with the restructuring announced in September, Tellabs expects to achieve $100 million in savings by the end of the year. Reductions include $75 million from annual operating expenses and $25 million from overhead costs of products and services.
Included in the $100 million plan are the future job cuts of 225 employees, in addition to 125 employees who were affected by the September restructuring. Under the plan, Tellabs will take charges of $12 million to $14 million this year, including approximately $8 million in the first quarter of 2008.
"Last year, nearly half of Tellabs’ revenue came from new products added since 2003," said Krish A. Prabhu, Tellabs’ president and CEO. "Gross profit margins are trending up, and Tellabs' plan will reduce annual costs and operating expenses by $100 million. Unfortunately, implementation of the plan will impact Tellabs' workforce."
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