More Agere Cuts

Electronic News, July 2, 2001

COMMUNICATIONS SEMICONDUCTOR MAKER AGERE SYSTEMS Inc., Allentown, Pa., is making more job cuts and taking charges up to $900 million. Agere (nyse: AGR.A) Friday said it is responding to the severe downturn in the semiconductor industry by rationalizing manufacturing capacity, reducing its workforce by an additional 4,000 employees and taking asset impairment charges as it resizes the business.

The latest workforce reduction is incremental to the 2,000-employee cut announced in April. The company expects to take total charges of up to $900 million associated with these initiatives, of which approximately $725 million will be recorded in the June quarter, with the remainder to be incurred in subsequent quarters. The company expects to realize annualized pretax savings of $520 million from these actions. "We built our business to serve a growing market, which is instead deteriorating," said John Dickson, Agere's president and chief executive officer. "We're continuing to take significant measures to adapt our bu siness in the face of changing conditions." Among the moves, Agere is actively seeking a buyer for its chip fabrication plant in Madrid, Spain, where it expects to discontinue operations by the end of the year.