Corning to Adjust Optical Fiber Operations in Response to Deteriorating Market Conditions
Corning expects to reduce its worldwide optical fiber workforce by approximately 1,000 employees Company says fiber shipments will decline in 2nd half
CORNING, N.Y.--(BUSINESS WIRE)--Aug. 29, 2001-- Corning Incorporated (NYSE:GLW - news) today announced plans to reduce its worldwide optical fiber workforce by approximately 1,000 employees by the end of 2001 in response to the continuing downturn in the telecommunications sector.
These reductions will include hourly and salaried employees primarily at manufacturing locations. Corning will begin to notify those employees impacted by today's announcement over the next few weeks. The company has already communicated plans to employees for short-term Labor Day holiday shutdowns at its Wilmington and Concord, North Carolina manufacturing facilities.
Today's action is being taken to match overall operations with the weakening demand for optical fiber and cable, primarily in North America and Europe. James B. Flaws, Corning's chief financial officer, said the company has seen a sudden slowing in orders across all fiber product lines, and now expects overall market growth for optical fiber in 2001 to be significantly less than the previous 15 percent outlook. Corning said its unit shipments of optical fiber and cable in the second half of the year will be less than the same period in 2000. Corning continues to see a downward trend in demand for its LEAF® and MetroCor(TM) fiber products, however the company still expects its premium fiber products, as a percentage of total fiber volume, to be at 20 percent or less for the year. ``While year over year fiber pricing has remained stable through August, we expect that average pricing for the year could be down by the previously disclosed zero to five percent range,'' Flaws said.
Flaws added, ``We are continuing to deal with the poor short-term visibility across the telecommunications market and we need to react quickly to changing market conditions. We remain confident in the robust outlook for bandwidth demand, and continue to believe that this demand will fuel growth in our telecommunications business in the future.''
``This has been an extremely difficult decision, but it is required due to the softening of worldwide demand for optical fiber in the second half of 2001,'' said Alan Eusden, senior vice president, Corning Optical Fiber. ``We are adjusting the pace of our manufacturing operations to match the overall market, and reducing staffing levels to control operating costs. We truly regret having to take these actions and we understand that there will be a significant impact on individuals, families and communities.''
Today's announcement brings Corning's 2001 reductions to approximately 8,000 positions or about 20 percent of its total global workforce of 41,000 at the beginning of the year. Corning anticipates that the costs of these reductions will be included in the previously announced $300 million to $400 million restructuring charge which will be recorded in the second half of this year. |
