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Agere sets more layoffs
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December 5, 2001: 12:45 p.m. ET
Chipmaker cuts 950 more jobs as it struggles with slumping sales.
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NEW YORK (CNN/Money) - Agere Systems Inc. on Wednesday said it will cut an additional 950 jobs as the communications semiconductor maker continues to grapple with a slowdown that has weighed heavily on its bottom line this year.
The latest round of job cuts at Agere (AGR.A: up $0.30 to $5.90, Research, Estimates) -- formerly the Microelectronics unit of Lucent Technologies (LU: up $0.29 to $8.16, Research, Estimates) - will bring the total number of employees terminated this year to 6,950 and leave it with a total work force of roughly 11,300.
The cuts announced Wednesday are mostly management positions within Agere's product groups, worldwide sales organization and corporate support functions, the company said.
Most of the employees affected by the job cuts announced Wednesday are located at Agere's facilities in New Jersey and Pennsylvania. The layoffs will be made over the next several months, the company said.
"It is critical that we continue to move forward with our plans to lower our cost structure and direct our resources to those areas that will best support our return to profitable growth," John Dickson, Agere's president and CEO, said in a statement.
The company plans a review of its product portfolio to ensure its current products are in line with the company's broader strategy while at the same time re-examine its manufacturing capacity to ensure it matches customer demand, Dickson said.
Agere, whose components are used in telecommunications and networking equipment, has been hit hard by a sharp slowdown in capital spending by large corporations and service providers in the face of slowing and uncertain economic conditions.
In October, the company logged a net loss of $3.35 billion, or $2.05 per share, for its fiscal fourth quarter on sales that plunged 40 percent. At the same time, Agere executives said the company could log breakeven operating results if it reaches quarterly revenue of $700 million, a change from its previous forecast of needing $900 million in revenue to break even.
For the current quarter, Wall Street analysts generally expect Agere to post an operating loss of 22 cents per share on roughly $541 million in sales, according to a survey conducted by earnings tracker First Call.
An Agere spokeswoman said all of the announced layoffs should be completed within the next six to nine months, and the company will record an as-yet unspecified charge against earnings, which it will report in its annual report for the current fiscal year. 
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