Alcatel Optronics to reorganise, cut 450 staff

5 June 2002 -- Alcatel Optronics has announced an industrial redeployment plan which will affect all of its manufacturing sites.

5 June 2002 -- Alcatel Optronics has announced an industrial redeployment plan which will affect all of its manufacturing sites.

The plan, which should be completed before the end of 2002, calls for a 25% headcount reduction (from 1,805 people at end March 2002 to approximately 1,350 by end-2002). Associated with the changes will be a one-time cost of around Euro60m in the second quarter.

At Alcatel Optronics, Lannion, north west France, the company will explore the reconversion of the production unit by seeking external industrial workloads with one or more partners.

"We are implementing the industrial redeployment plan in order to further adjust to the persistent market downturn," said Jean-Christophe Giroux, CEO.

"An action plan was already initiated in mid-2001 and has already yielded significant results in terms of headcount reduction, inventory control, CAPEX freeze and cost-cutting. We are now accelerating our efforts and strengthening our actions to better adjust our cost structure to current conditions and expect all of these cost savings to be effective in the fourth quarter of this year."

The Industrial Redeployment Plan includes the following:
- In France, the Optical Fiber Amplifier (OFA)/Optical Interface Subsystem (OIF) assembly, currently based in Illkirch, will be transferred back to Alcatel Optronics' primary facility for active components in Nozay.

- In Nozay and Lannion, France, Alcatel Optronics will continue to adapt to market conditions by utilizing part-time employment, early retirement and prolonged leaves to reduce headcount.

- In Canada, the Fiber Bragg Grating (FBG) manufacturing, currently based in Gatineau (Quebec) will be closed and the manufacturing activities transferred to Alcatel Optronics UK, based in Livingston, Scotland. Alcatel Optronics will retain its R&D activities along with a commercial presence in Canada. The activity will be housed at Alcatel's Canadian facility, based in Kanata (Ontario).

- In the USA, the Plano, Texas, site will be adjusted according to the depressed market conditions through a reduction in headcount.

- In the Netherlands, Alcatel Optronics intends to dispose of its MEMs and planar design software activities, through a management buy out, expected to complete at the end of June.

- In the Livingston, Scotland site, the industrial space will be rationalised to incorporate the FBG manufacturing activities while continuing production of the passive planar lightwave circuit product lines. Consolidating the two passive terrestrial manufacturing activities in one location should result in economies of scale as well as improved technical synergies. Unrelated to this move, some support functions will be further reduced at this site.

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