Recent layoffs due to planned outsourcing

SANTA CLARA, CA AND IRVINE, CA—Laser Focus World recently ran two stories on its Web site describing employee layoffs at Newport Spectra-Physics and Coherent (see “Spectra-Physics reduces staff at Tucson laser diode facility” at www.laserfocusworld.com/articles/337653 and “Coherent lays off 144 in Auburn manufacturing plant” at www.laserfocusworld.com/articles/338018).

SANTA CLARA, CA AND IRVINE, CALaser Focus World recently ran two stories on its Web site describing employee layoffs at Newport Spectra-Physics and Coherent (see “Spectra-Physics reduces staff at Tucson laser diode facility” at www.laserfocusworld.com/articles/337653 and “Coherent lays off 144 in Auburn manufacturing plant” at www.laserfocusworld.com/articles/338018). While layoffs are never good news, it is important to clarify that the layoffs had been planned for some time as a result of pre-announced outsourcing of particular product lines and technologies.

“As part of our ongoing efforts to reduce the manufacturing costs of our diode lasers, Newport’s Spectra-Physics Lasers Division entered into an agreement to outsource the majority of our diode laser assembly and test operations to a sub-contract manufacturer in Asia; we believe these efforts are necessary given the current competitive market conditions, and that they better position us to provide our customers the innovative and high-quality product they expect from Newport,” said Scott Dunbar, general manager of Newport’s Spectra-Physics High Power Laser Diode Business in Tucson, AZ. “In Q3 we successfully transitioned our first operations, and, as a result, announced a workforce reduction of 29 employees. We will continue to transition portions of our operations to Asia over the next several months, and we estimate that these efforts will affect approximately 80 employees in total. We remain fully committed to our diode laser business and to our Tucson operations, and will continue to operate and invest in our wafer fabrication facility and new product development activities.”

“In the case of Coherent, the reduction in workforce relates to the closure of the Auburn, CA facility no later than the second quarter of fiscal 2009,” said Coherent CFO Lean Simonet. “Coherent is outsourcing its optics manufacturing to Research Electro-Optics (REO), a privately held optics manufacturing and technology company based in Boulder, CO. It made sense for Coherent to partner with a company like REO whose main focus is in the area of optics.” The partnership means that REO will handle fabrication and coating of optical components for Coherent. “It will allow Coherent to reduce its costs without sacrificing quality,” added Simonet. “Every Auburn employee was offered the chance to either join REO or accept opportunities at other Coherent locations.”

—Gail Overton

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