Agere Announces Layoffs, Reaffirms Q4 Outlook

Agere Systems is reducing its workforce by 500 employees across the business, including administrative functions, sales, marketing and product development. The company said it expects to reduce its quarterly R&D and selling, general and administrative (SG&A) expenses to approximately $170 million to $175 million by the third quarter of fiscal 2005, beginning in April. In the quarter ended June 30, the company had reported $195 million in these expenses.



In addition, Agere announced that it would cease operations in its wafer manufacturing facility in Orlando, Florida, by the end of December 2005, if a sale of the facility cannot be arranged by that time.



Agere also reaffirmed that revenues in the September quarter are still expected to be in the range of $420 million to $445 million, which was the guidance provided in July.



The company expects revenues for the first quarter of fiscal 2005, ending December 31, 2004, to be sequentially lower by approximately 5 percent. This decline is due to inventory adjustments by customers of 2.5G/GPRS mobile phone and telecommunications products, as well as a seasonal decline in IP revenues and shipments of chips for satellite radio. Gross margin is expected to decrease sequentially due to lower utilization of capacity and lower revenue levels. http://www.agere.com