8-KOther Events

CORNING INC /NY 8-K Report (Aug 29, 2001)

Filed August 29, 2001For Securities:GLW

Summary

Corning Incorporated (GLW) announced on August 29, 2001, significant workforce reductions within its optical fiber segment. In response to a rapidly deteriorating telecommunications market and a sudden slowing of orders, the company plans to eliminate approximately 1,000 jobs globally by the end of 2001. This action is primarily a measure to align operational capacity with weakening demand, particularly in North America and Europe, and to control operating costs. These reductions are part of a larger trend for Corning in 2001, bringing the total job cuts to approximately 8,000 positions, or about 20% of its global workforce. The financial impact of these latest reductions is expected to be absorbed within the previously announced restructuring charge of $300 million to $400 million for the second half of the year. Despite the current downturn, Corning expressed confidence in the long-term outlook for bandwidth demand and its telecommunications business.

Key Highlights

  • 1Corning to reduce global optical fiber workforce by approximately 1,000 employees by year-end 2001.
  • 2Reductions are a direct response to deteriorating market conditions and a sudden slowing of optical fiber orders.
  • 3Company expects a significant decline in optical fiber and cable unit shipments in the second half of 2001 compared to the same period in 2000.
  • 4Overall market growth for optical fiber in 2001 is now projected to be significantly less than the prior 15% outlook.
  • 5Expected average fiber pricing for the year could be down by 0% to 5%.
  • 6These layoffs bring total 2001 reductions to about 8,000 employees (20% of global workforce).
  • 7Costs associated with these reductions will be part of a previously announced $300-$400 million restructuring charge.

Frequently Asked Questions

Corning is reducing its workforce in response to a significant downturn in the telecommunications sector, characterized by a sudden slowing of orders and weakening demand for optical fiber and cable, particularly in North America and Europe.

The costs associated with these workforce reductions are expected to be included in Corning's previously announced restructuring charge of $300 million to $400 million, which will be recorded in the second half of 2001.

Corning's outlook for the optical fiber market has worsened, with expectations for overall market growth in 2001 significantly reduced from previous forecasts. The company anticipates lower unit shipments in the second half of 2001 compared to the prior year, and potential price declines. However, Corning remains confident in the long-term robust outlook for bandwidth demand.

These 1,000 job reductions bring Corning's total workforce reductions for 2001 to approximately 8,000 employees, which represents about 20% of its total global workforce at the beginning of the year.