JDS Uniphase Corp., the world's leading maker of fiber-optic components, is cutting 3,000 jobs globally-10% of its workforce. The cuts will be concentrated in passive-optical-networking components operations in San Jose, Calif., and Ottawa, Ontario.
JDS is only the latest in the fiber-optics industry to look for savings by cutting jobs. Jan. 24, telecom-equipment giant Lucent Technologies cut about 10% of its staff. Feb. 15, No. 2 fiber-optics-component company Nortel Networks said it too would cut about 12% of its staff.
"It's tougher for carriers to raise money, and the overall communications space has slowed down a little bit," says Max Scheutz, an analyst with Thomas Weisel. But a market slowdown may be only part of the story. "JDS recently opened a facility in China," Scheutz says. San Jose and Ottawa are two of the highest-cost labor markets in the world, he says, and JDS may be looking to save money by setting up automated manufacturing overseas. The result could be "lower costs and higher function" for customers of JDS' passive components.
A JDS spokesman acknowledged the new plant in China, but denied that it's behind the cuts. "Analysts want to paint a one-to-one correspondence," he says, but the cuts have more to do with the market, corporate realignment, and a push for improved efficiency.
Shares of JDS Uniphase closed down 14.75%, to $27.81, in heavy trading, off more than 80% from a 52-week high of $153.44.