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.