Despite growing profits, Solectron Corp. reports that it will lay off 1,400 workers in Europe and North America in the next year.
The company employs 2,900 at its Texas operations in Austin -- making it the eighth-largest corporate employer in Austin, according to the Austin Business Journal's annual Book of Lists. According to a regulatory filing, it leases about 747,000 square feet in the Austin area.
Company officials in Austin could not immediately be reached for comment.
Solectron (NYSE:SLR) is based in Milpitas, Calif. and manufactures electronics for the high-tech industry.
The company says the planned job cuts are part of a plan to realign its manufacturing capacities. It says the restructuring will cost about $50 million to $60 million in cash layouts.
The restructuring will eventually consolidate about 700,000 square feet of company space in Western Europe and North America.
Before announcing the job cuts today, Solectron reported drastically higher fourth quarter profits -- up 220 percent from last year at this time -- of $36.8 million, or 4 cents per share, compared to just $11.5 million, or 1 cent per share in the fourth quarter of 2005.
Its fourth quarter sales were $2.9 billion, down a half a billion from last year's $2.4 billion during the fourth quarter.
For the full fiscal year of 2006, the company reported $133.2 million in profit, or 15 cents per share, up from last year's $3.4 million, or less than 1 cent per share profit. Sales this year were up slightly to $10.6 billion, compared with $10.4 billion last year.
"The highlight of fiscal 2006 was our return to growth," says Solectron CEO Mike Cannon. "Looking ahead to fiscal 2007, we are confident we have taken the actions to deliver continued improvement in growth and profitability."
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