JDS Uniphase (Nasdaq: JDSU) fell US$1.88 to $22.30 in morning trading Tuesday, after reporting quarterly results in line with previously lowered expectations and announcing plans to cut 5,000 jobs as part of a restructuring.
The fiber-optic component maker said that a “global realignment program” will result in charges of $375 million to $425 million in coming quarters, as JDS cuts its workforce by 20 percent and consolidates its manufacturing and sales operations.
JDS said it will move some manufacturing operations to China, reorganize its sales force and consolidate some administrative functions. About 25 buildings will be vacated as part of the consolidation, the company said.
“We believe we have served our customers well during prior periods of exploding demand,” said co-chairman and chief executive officer Jozef Straus. “Our industry is in a near-term downturn, and we must act decisively and rapidly.”
JDS said that it will take charges to fourth-quarter earnings to cover employee severance agreements, inventory writeoffs and other issues associated with the plan.
Costs for accelerated depreciation, moving and other parts of the plan will be taken during the first three quarters of the next fiscal year, as facilities and equipment are phased out.
While the restructuring will cost $375 million to $425 million overall, the plan is designed to cut expenses by more than $250 million a year, according to JDS.
JDS said that pro forma income for the third quarter ended March 31st totaled $160 million, or 14 cents per share, compared with $108 million, or 11 cents, in the same period last year. Including extraordinary items, the company lost $1.3 billion, or $1.13 per share, in the latest quarter.
JDS had twice lowered its outlook for the fiscal third quarter, saying that demand had been hurt by a drop in capital spending on the part of big customers. In February, the company announced 3,000 layoffs, saying that the “current business environment” posed “opportunities for realignment and improved efficiency.”