High-tech glass and maker Corning Inc announced restructuring plans that will involve cutting staff by 13 per cent by the end of 2009. The company will cut 3,500 jobs, introduce and an early retirement programme, effect global workforce reductions and undertake consolidation of manufacturing facilities.
The restructuring efforts are aimed to save the company $150 million to $200 million a year.
The company announced a fall of 30 per cent in sales for the fourth quarter of 2008 from the previous year with earnings per share plummeting 70 per cent over the same period in 3007. Its fourth quarter net income fell to $249 million from $768 million, a year earlier, with earnings per share falling from 49 cents a share to 16 cents a share.
According to Wendell Weeks, chief executive officer, the company experienced a significant momentum shift many of its core businesses in the fourth quarter with the recession taking hold. The company is now in the process of adjusting its operations to reflect the lower expected sales in 2009.
Corning's job cut announcement comes in the wake of more than 50 companies announcing job cuts totaling more than 210,000 in January alone.
With the declining economy, demand, especially from manufacturers that use liquid crystal displays in flat-panel displays, in flat-panel televisions and computer displays has fallen. The slowdown has been especially severe among Corning's customers in Taiwan.
James B. Flaws, vice chairman and chief financial officer, said that the company anticipated a slow start to 2009 with first-quarter combined display volume down 20 to 25 per cent as the supply chain continues to reduce inventory during the seasonally weaker retail sales quarter. He added that as per the company's announcement last December it will also experience high single-digit price declines in the first quarter resulting in lower sales, gross margin and net income.
Flaws said that despite the global recession the company remains well positioned for the long term in its core businesses. He added that though it is difficult to predict when the recession would end, the world will only forward with optical fiber solutions replacing copper lines and LCD televisions making CRT models obsolete.
He said that demand for the company's products would continue to increase with the improvement in the economy.
Corning Inc is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life science including glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks.