| Elcoteq to Slash 5,000 Jobs, Close Plants |
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| Written by Mike Buetow | |||
| Thursday, 15 January 2009 06:17 | |||
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HELSINKI -- Elcoteq today said it plans to cut 5,000 workers, or about 25% its global workforce, and shut plants around the world.
The EMS firm, the world's sixth largest according to the Circuits Assembly Top 50, said it would close plants in the US, Romania and Russia, while consolidating its China operations to Beijing. "The restructuring plan does not imply changes in the company's strategy; it merely consists of preparatory measures to adjust to the anticipated changes in market conditions and to secure profitability in 2009 and beyond," Elcoteq said in a press release. Elcoteq maintained its 2008 guidance, saying fourth-quarter net sales were approximately $676 million. The company, which employs 21,000 workers worldwide, will save an estimated $105 million to $131 million annually with the cuts. The company plans to close its plants in Arad, Romania; Richardson, TX; and St. Petersburg, Russia. (It attempted to sell the latter last year, only to have the deal fall through.) Its operations in Shenzhen will be moved to Beijing. "Even with these measures, Elcoteq will maintain ... manufacturing operations for its customers in Mexico, Brazil, Estonia, Hungary, China and India," the company noted. Other cost-savings measures, including selling machinery and equipment, ending facility and machinery lease agreements as well as cutting external services, will be studied, Elcoteq said. A trio of advisors, including Berhan Ltd., Fredericks Michael & Co. and Avista Advisory Partners, have been named to help raise capital.
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| Last Updated on Thursday, 15 January 2009 06:18 |
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