Agere to Exit Optical Electronics, Cut Jobs

Communications component maker Agere Systems Inc. will attempt to cut its losses in a lackluster telecommunications market by eliminating more than a third of its work force--about 4,000 jobs--and quitting a business that accounts for about 10% of its revenue.

Agere, a spinoff of Lucent Technologies Inc. based in Allentown, Pa., announced Wednesday that it was getting out of the optical electronics business, which makes equipment that controls fiber-optic systems.

Instead, it will focus on its main revenue generator, supplying integrated circuits that access, move and store network information for components including telecommunications hardware and desktop computers, said John Dickson, president and chief executive.

Shares rose 12 cents to $1.69 on the New York Stock Exchange.

The job cuts will shrink the company’s work force from about 11,200 to about 7,200 by the end of next year. That’s down from 18,500 workers in March 2001. Three months later Agere announced it would cut 4,000 jobs in the first in a series of reductions.

Agere said it will seek a buyer for its optoelectronics unit and plans to be out of that business by June 2003.

The company said market research indicated optoelectronics revenue industrywide is expected to be about $2.3 billion this year, down sharply from $7 billion in 2000, due to excess capacity in current networks and delays in moving to higher-speed systems.

The weakness is pronounced in long-distance phone systems that provide the main market for Agere’s optoelectronics components, Dickson said, adding that demand isn’t expected to rebound until 2004 or 2005.