JDS sees more jobs cuts in its future
The maker of optical components, which announced in April that it planned to cut 20 percent of its staff, says more layoffs are likely.
"It is likely that additional job cuts will be required," JDS Uniphase spokeswoman Lori Goulet said in an interview.
The news comes as no shock to Wall Street since the company already announced layoffs of 5,000 workers, or 20 percent of its staff, in April, and then warned that revenue would miss previous company forecasts on June 14.
"I don't think it's that surprising," said analyst Tim Anderson of Salomon Smith Barney. "The company was already intending to lay off 20 percent of its employee base, and conditions have deteriorated since then."
In its warning two weeks ago, JDS also indicated that it was considering further options to carry out its previously announced restructuring plan.
"The business downturn has been rapid, steep and unprecedented, and the continuing lack of visibility from our customers suggests to us that a cautious outlook continues to be warranted for the short term," said JDS Chief Executive Jozef Straus in the warning statement. "At present, order levels clearly reflect lower carrier capital spending and the resulting desire of our customers to reduce inventories sharply."
The optical industry has hit a recent slump because telecom carriers have reduced their spending, which means they will buy less from equipment makers who will then buy fewer parts from companies like JDS.
Anderson and U.S. Bancorp Piper Jaffray analyst Conrad Leifur both believe that JDS Uniphase's news means the sector's slump will last into next year. "The industry looks like it's going to be down in the September quarter," Leifur said. "We don't see any signs that there's going to be a recovery anytime within the next six months."