JDS to Cut 3,000 Jobs as Demand Slows; Shares Hit New Low
Amid slowing demand and growing competition, JDS Uniphase Corp., the world’s No. 1 supplier of fiber-optic components, said Tuesday that it will cut 3,000 jobs, or 10% of its work force, mainly in the manufacturing of passive products that boost optical network capacity.
JDS said it still plans to hire employees for its high-growth businesses but does not yet have any staffing estimates.
The news sent the company’s shares to a new 52-week low of $27.44 on Nasdaq during late afternoon trading, but the stock rebounded slightly to close at $27.81, off $4.81, or 15%. Already battered along with the ailing telecommunications sector, the shares are nearly 80% off their year highs.
In the next week, San Jose-based JDS said it will cut about 700 jobs from its staff of 9,000 in San Jose and fire 350 contract workers in Ottawa, where it employs 4,000.
The next round of cuts will be made by the end of June, when the company’s fiscal year 2001 ends.
JDS is the latest in a string of high-tech powerhouses to slash staffing amid slowing demand.
Nortel Networks Corp., the world’s No. 2 supplier of fiber-optic systems equipment and JDS’ largest customer, will cut 10,000 jobs, or about 12% of its work force, this year. Rival Lucent Technologies Inc. also will chop 10,000 jobs, about 10% of its staff. Wireless technology firm Motorola Inc. will cut 6,800 jobs, and Ericsson is to cut 11,000 jobs by year’s end.
The JDS cuts will come mainly in the company’s passive business--products that expand fiber-optic network capacity by bending, combining or separating light. That sector has been hit by slower lead times, shrinking demand and an increasing number of competitors.
Demand is stronger for modules and active components, which, unlike passive technology, include electronics and are used to pump, generate or amplify light. Modules combine multiple products in one package.
Passive and component sales represented 59% of JDS revenue in its second quarter, while active and module sales made up 30% of revenue.
JDS had about 29,000 staff worldwide after its Feb. 6 takeover of SDL Inc. That will be trimmed to 26,000 by the end of June.
The company, which said it understands why analysts are trimming their estimates to below the company’s forecasts, said it will not comment on its guidance.
