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AMP to cut 700 more jobs
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January 28, 1999: 7:44 p.m. ET
Near Tyco deal, electric gear giant trims more jobs, bests Q4 estimates
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NEW YORK (CNNfn) - AMP Inc. said Thursday it will pare another 700 workers from its payroll as the electronic and electrical equipment giant prepares for the completion of its $11 billion merger with Tyco International Inc.
The Harrisburg, Pa.-based company, which also reported fourth-quarter operating earnings that beat analysts' targets Thursday, said its profit improvement plan unveiled last June will now involve a reduction of 4,200 positions, or about 9 percent of its workforce.
That's up from 3,500 jobs announced in June. A company spokesman cited Asia's crisis as a source of trouble for the company over recent quarters.
"The profit improvement plan now calls for closing a worldwide total of 27 manufacturing plants and 26 administrative facilities during 1998 and 1999," Bob Ripp, chairman and chief executive officer of AMP, said in a statement.
"We expect to reduce AMP's headcount by about 4,200 net indirect positions. All of these actions will produce annual savings in excess of $400 million," he added.
A company spokesman said the 4,200 in net reductions has been well-known in the financial community and includes 1,700 jobs that have been pared through voluntary retirement.
The reduction of "net indirect" positions involves mainly administrative jobs, said the spokesman. The profit improvement plan was first announced last June.
Last November, Tyco (TYC), a diversified manufacturer, stepped up with a friendly offer for AMP as the troubled company carried out a battle to avoid takeover from Dow member and industrial titan AlliedSignal (ALD).
AMP said it expects to close the merger with Tyco in March.
Last gasp at earnings beats targets
Also Thursday, AMP announced fourth-quarter 1998 earnings, before restructuring charges, rose to $107 million, or 49 cents per share, compared to $79.3 million, or 36 cents per diluted share, in the same quarter a year earlier.
That was a penny better than analysts' consensus targets for the quarter, as reported by First Call Corp., which tracks such earnings forecasts.
AMP's reported a net loss of $79 million, or 36 cents per diluted share, compared to a net profit of $127.4 million, or 58 cents per diluted share, in the same quarter a year ago.
That includes a one-time charge of $186 million in the quarter, of which $154 million in after-tax charges was connected to the profit improvement plan and $17 million to defend against AlliedSignal's takeover bid.
Revenues fell to $1.4 billion in the fourth quarter of 1998, compared to $1.45 billion in the same period of 1997.
For all of 1998, AMP reported net earnings of $2 million, or 1 cent per share, compared to $473 million, or $2.08 per share, during the same period a year ago.
Shares of AMP (AMP) added 1-1/6 to 52-3/8 Thursday ahead of the announcement.
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