Corning to cut workforce

In an ominous sign of more turmoil awaiting the telecommunications industry, Corning Inc. set a US$ 1-billion charge to cut 4,000 more employees and idle its plants for the last two months of the year…

In an ominous sign of more turmoil awaiting the telecommunications industry, Corning Inc. set a US$ 1-billion charge to cut 4,000 more employees and idle its plants for the last two months of the year. The charge is nearly triple the US$ 300 million to US$ 400 million originally forecast for earlier plans for cutting 8,000 workers. The leading fibre-optic manufacturer Corning will record US$ 350 million of the charge in its third quarter ended 30 September. New York-based Corning also indicated it wouldn“t come close to meeting analysts“ expectations for its third quarter. Excluding certain depreciation and one-time items, the company said it would post per-share earnings of between two and six cents. The consensus estimate of analysts surveyed by Thomson Financial/First Call is 12 cents. In addition, the company said it will report a loss, again after excluding depreciation and one-time items, for the fourth quarter. Analysts expected a nine-cent a share gain. For most of the year, Corning has focused its restructuring efforts on photonics, which are small parts used to send light across optical fibre. Conditions appear to be worsening in the photonics business. The company now says sales will be US$ 475 million to US$ 500 million. Previously, Corning had expected photonic sales to hit as high as US$ 1.8 billion for 2001. “The total optical-fibre market will be negative for the first time in history this year,” chief financial officer James Flaws said. Corning says it will idle the majority of its worldwide production capacity between 1 November and 31 December.