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Power-One to Cut 1,000 More Jobs to Reduce Costs Amid Slowdown

Telecom: Parts maker posts wider loss than expected for second quarter. Trim follows firing of 2,400 workers.

July 26, 2001|From Bloomberg News

Power-One Inc. said Wednesday that it will fire 1,000 employees after the Camarillo-based maker of parts that convert electrical currents for telecommunications equipment reported a wider-than-expected second-quarter loss.

The cuts will occur this year, mostly at plants in Mexico and the Dominican Republic.

Power-One had 7,500 employees before firing 2,400 in the second quarter.

Customers such as Cisco Systems Inc., Nortel Networks Corp. and Lucent Technologies Inc. canceled orders in the first quarter and slowed purchases in the second quarter, Chief Financial Officer Ed Schnopp said.

The loss was $80.4 million, or $1.02 a share, compared with net income of $10.6 million, or 14 cents, a year earlier. Sales fell 18% to $92.9 million, compared with $113.8 million a year earlier, the company said.

Power-One had previously moved production to plants in the Dominican Republic, Slovakia and Mexico from facilities in Boston, Irvine, and Uster, Switzerland.

Engineering and sales staff will continue to work at the U.S. and Swiss facilities, Schnopp said.

The company will save about $30 million to $35 million a year from the job cuts.

Power-One shares rose $1.08 to close at $13.59 on Nasdaq.

Excluding charges for asset impairment, inventory write-downs and expense amortization, the loss would have been $4.3 million, or 5 cents, the company said.

On this basis, analysts polled by First Call/Thomson Financial expected a loss of 1 cent a share.

Excluding charges in the year-earlier period, Schnopp said the company would have had a profit of $12.8 million, or 18 cents a share.

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Stock Slump

The slowdown in the telecom sector has affected components makers such as Power-One. The company is cutting staff to help shore up losses and boost its

stock, which has fallen 80% in the last year.

Power-One weekly closes and latest on Nasdaq

Wednesday: $13.59, up $1.08

Source: Bloomberg News

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