Furukawa to ax OFS workforce [part of the former Bell Labs]

Yomiuri Shimbun ^ | 2003-08-02

[Lessismore]

Furukawa Electric Co., which is looking into further streamlining the operation of its U.S. affiliate--Optical Fiber Solutions (OFS)--plans to reduce its workforce at the OFS Laboratories in New Jersey, company sources said Saturday.

Many former employees of Bell Laboratories, which was associated with Alexander Graham Bell, inventor of the telephone, are now working at OFS Laboratories.

Bell Laboratories' research and development abilities were the main reason Furukawa acquired OFS, but it decided that it has to carry out restructuring without sacred cows, the sources said.

In November 2001, Furukawa purchased OFS from Lucent Technologies, a major U.S. communications machinery maker, for 280 billion yen, becoming the world's second-largest optical fiber company.

However, after the burst of the IT bubble in the United States, OFS sales plunged by 80 percent to 30 billion yen from the level prior to Furukawa's acquisition.

OFS Laboratories was established when Bell Laboratories became an umbrella firm of Lucent Technologies in 1996 by transferring about 60 researchers from the Bell lab to the OFS lab.

The OFS lab conducts research and development on next-generation fiber optics communications and technologies to improve optical fiber.

Furukawa said it would cancel basic and long-term research and terminate the employment of researchers responsible for the projects.

Furukawa is expected to lay off more than 10 researchers, but as their salaries are high, the move will have a significant cost-cutting effect, the sources said.

Furukawa already laid off about 3,000 OFS employees and closed some production lines by the end of last year.

The restructuring resulted in the firm incurring a record high after-tax loss of 114 billion yen on a consolidated basis for the business year that ended in March.

As demand for optical fiber in the United States is not expected to recover this year, OFS is likely to again post a loss, the sources said.

Thus, in addition to laying off several hundred employees and significantly consolidating production lines, Furukawa plans to map out as early as August further restructuring measures, including the sacking of OFS lab employees, the sources said.

[lelio]

A chart showing Lucent's employment throughout the last 5 years would be interesting. Plus those of companies that Lucent's spun off / sold and then were later downsized.