A 500-employee cut hit Allentown, Pa.-based Agere Systems this morning, as the company announced reductions across the business.

With the action, the company expects to reduce its quarterly research and development (R&D) and selling, general and administrative (SG&A) expenses to approximately $170 million to $175 million by its fiscal Q3 2005, beginning in April.  In the quarter ended June 30, Agere had reported $195 million in these expenses.

In addition, Agere announced that it would cease operations in its wafer manufacturing facility in Orlando, Fla., by the end of December 2005, if a sale of the facility cannot be arranged by that time.  In 2002, the company had announced plans to sell this facility as an ongoing operation, but has not yet found a suitable buyer.  The facility currently employs approximately 600 people. Cost benefits from the facility closing should begin accruing in fiscal 2006, Agere said.

After all the trimming is done, restructuring charges and expenses should cost Agere between $340 million to $360 million, with approximately $130 million to $140 million to be recorded in the current quarter, ended today, and the remainder to be incurred in subsequent quarters.

By: DocMemory
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