Ottawa: JDS Uniphase Denies Jobs to be Outsourced Overseas

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Ottawa Citizen

Tuesday 30 January 2001 JDS Uniphase cuts 700 from workforce

Company denies contract jobs to be sent to overseas workers

Kristin Goff and Vito Pilieci The Ottawa Citizen

JDS Uniphase Corp., one of Ottawa's biggest high-tech employers, has laid off 700 contract workers, slicing roughly 6.5 per cent of its Ottawa workforce, partly to help deal with the prospect of a slowing economy.

Yesterday, company officials described the layoffs as "part of normal business operations and planning" that reflects lower staffing needs because of improved manufacturing efficiencies and a more cautious outlook for sales.

The layoffs, which followed Nortel Networks' announcement this month that it was cutting 1,100 permanent and contract jobs in Ottawa, was generally applauded by investment analysts as a sign that JDS Uniphase is keeping a rein on costs.

Economists who have been predicting Ottawa will once again be the hottest economy in the country this year, were equally sanguine.

"I would say, so far, based on the timing and magnitude of what we know (about layoffs), there's no cause for alarm," said Barry Nabatian, general manager of Market Research Corp.

Mr. Nabatian predicted the laid-off unskilled or lower-skilled manufacturing workers would have little trouble finding jobs because demand for all types of workers is still very high.

About 2,000 workers have been let go this month from Ottawa technology companies. Besides Nortel and JDS Uniphase, CrossKeys laid off about 70 workers in a restructuring and SR Telecom closed its Ottawa office, eliminating 37 jobs.

On Friday, JDS Uniphase, which makes fibre-optics components, warned that its sales growth will likely slow in the current quarter to seven to 10 per cent, or no more than half its recent quarterly growth rate. But chief executive Jozef Straus declined to say whether that would result in job cuts.

The answer came over the weekend as the 700 contract workers, all supplied by Adecco Canada, received layoff notices, effective immediately. Adecco, a temporary employment company, said it would help them find new jobs.

The layoffs are permanent for 400 people who had been with the company for less than 12 weeks. The remaining 300 are 13-week furloughs.

Any recall depends on demand for JDS products and employee attrition, according to human resources vice-president Katherine Payne. JDS Uniphase has no current plans for any further layoffs in Ottawa, Ms. Payne said, and will continue hiring more professionals with engineering and technical skills.

She said none of the layoffs was directly linked to plan to outsource some production to lower cost facilities in China or elsewhere. JDS Uniphase is ramping up production at a new 320,000-square-foot plant in Shenzhen, China, 45 kilometres from Hong Kong, that opened last month.

Mark Langley, an analyst with Epoch Partners in San Francisco, said JDS Uniphase has been aggressively working to automate many of its labour intensive tasks and is seeking ways to lower costs by outsourcing production of some optical components.

But that doesn't spell the beginning of the end for Ottawa manufacturing, Mr. Langley said. While some labour intensive and mature products can be outsourced, many don't lend themselves to production at a distance, he said.

Shares of JDS Uniphase, fell $2.50 to $89.00, on the Toronto Stock Exchange yesterday.

-- Rachel Gibson (rgibson@hotmail.com), January 30, 2001


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