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On June 29, 2001, Agere Systems announced 4,000 additional job cuts and said it planned to close its wafer fab in Tres Cantos, near Madrid, by year-end while seeking a buyer for the plant. The company framed the move as a response to a deteriorating market and falling demand; the announcement described a plan, not proof of the site’s eventual fate.
What Agere announced on June 29, 2001
Agere said it would eliminate another 4,000 positions, close the Madrid-area wafer fabrication plant by the end of 2001, and try to sell the facility. The announcement also included plans to rationalize underused manufacturing capacity in Orlando and Pennsylvania and consolidate satellite manufacturing sites and leased corporate offices. These details were reported at the time by EE Times.
The 4,000 figure was an additional reduction, not the total number of employees at the company. Agere had 18,500 employees at the end of March 2001, according to the contemporaneous report. It said the two rounds of cuts announced that year were expected to reduce headcount by 32% from that point. Those were estimates made at the time, not independently audited final outcomes.
Why Agere targeted the Spain fab
Agere said the plant was operating at less than one-fourth of capacity as demand for its products fell faster than expected. It made networking and communications devices using 0.3-, 0.35- and 0.5-micron CMOS processes. A Spanish report identifies the site as Tres Cantos and also connects the plan to declining demand for microprocessors used in PCs and telecommunications systems (EE Times; Computing).
The low utilization helps explain why the announcement paired job cuts with a manufacturing-capacity change. It does not, by itself, establish a general industry judgment about those process generations: the stated rationale was the decline in demand for products made at this facility.
How many workers were tied to the Madrid plant?
About 1,000 of the 4,000 newly announced cuts were expected to result from closing the Madrid fab, according to EE Times. The remaining cuts were part of Agere’s broader restructuring actions; the cited report does not provide a complete site-by-site allocation.
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What the restructuring was expected to cost and save
Agere projected $520 million in annual pretax savings and up to $900 million in total restructuring charges. Of those charges, $725 million was expected to be recorded in the fiscal quarter ending June 30, 2001. These were company estimates reported by EE Times in June 2001, not confirmed final totals.
What Agere said about the downturn
President and CEO John T. Dickson described the change in market conditions this way: “We built our business to serve a growing market, which is instead deteriorating.” Responding to analysts about the following quarter, he said: “We are not ‘flying blind,’ but we have very, very limited visibility from our customers, just as they have very limited visibility from their end customers.” Both statements appeared in EE Times’ June 29, 2001 report.
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What is known about the plan’s later status
Agere’s fiscal 2006 Form 10-K says the company’s first restructuring program began in fiscal 2001 in response to significant revenue declines and was substantially complete by December 31, 2004. That statement concerns the broader program; it does not establish whether the Tres Cantos plant was sold, when it actually stopped operating, or what later happened to the site. The available contemporaneous report documents Agere’s intention to close it by year-end and seek a buyer, rather than a verified final disposition. Agere Systems’ fiscal 2006 Form 10-K
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