Plant Closings Ahead, Flextronics CEO Says PDF Print E-mail
Written by Mike Buetow   
Monday, 22 October 2012 10:11

SAN JOSE -- Stung by a large drop in revenue and trying to meet stated goals for margins, Flextronics is planning another round of layoffs and factory closings.

On a conference call with analysts, CEO Mike McNamara said the world's second largest EMS company expects overall revenues to drop as much as 6% sequentially in the current quarter, in part due to the loss of its largest smartphone customer, RIM.

He said the contract printed circuit board assembler would reduce its footprint as a result to improve its cost structure.

"I don't think we're ready yet to put a number on it. But ... we will certainly do some organizational restructuring. We will certainly do some facility consolidation. ... [W]e think there's ways to simplify and streamline the efficiency of the organization ... which also will contribute to more productivity." McNamara did not specify which regions would see reductions, although one of its Shanghai area facilities is being shuttered, with production relocated to Suzhou.

Looking to the March quarter, McNamara said Flextronics expects margins to improve, but slower sales to continue to linger.

Flextronics did say it was raising its annual capital expenditure estimates by some $50 million to $100 million, to a range of $400 million and $500 million.

 

On Oct. 22, chat with Mike Buetow about PCB West and SMTAI at PCB Chat.


 

 

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