Despite opinions by some that the telecom industry has hit bottom, layoffs continue at key vendors in the industry.
Tellabs today announced that it will outsource manufacturing of its North American products to Sanmina-SCI, resulting in the layoff of about 325 employees.
The manufacturing transition begins immediately, and manufacturing operations in Bolingbrook are expected to cease by year-end. Tellabs plans to move remaining employees from its main building in Bolingbrook to its Naperville headquarters and sell the 545,000-square-foot Bolingbrook main building.
Tellabs expects to benefit from lower manufacturing costs and by freeing up capital now tied up in equipment, inventory and facilities. Since implementing outsourced manufacturing will take through year-end to accomplish, these benefits will be slight in 2003 and are expected to increase in 2004 and beyond. Beginning in the third quarter, Tellabs will record an estimated $90 million to $110 million in charges connected with the outsourcing move.
Siemens also announced layoffs this week. Given the sustained weakness of the market, Siemens mobile, the mobile communications arm of Siemens AG, said it expects to cut 2,300 jobs, including 500 in Germany, by the end of the coming fiscal year.
