Tellabs to shed 200 jobs with Drogheda closure

The Tellabs plant in Drogheda, Co Louth, will close losing more than 200 jobs. This is the latest in a series of high profile shutdowns in which almost 2,000 employees have lost their jobs this month, in flagship companies such as Gateway in Dublin and General Semiconductor in Cork.

Tellabs also employs more than 450 people in Shannon, Co Clare, but these jobs are not under threat.

The job losses in Drogheda are part of a worldwide consolidation of operations in which the US based multinational which manufactures equipment for the telecommunications industry cut 1,000 of its 8,000 workforce.

While 55 of the Drogheda employees will be transferred to its larger plant at Shannon, the majority of the workforce face unemployment as the plant winds down by December 31st.

Around 65 of the staff will be made redundant at the end of September with the remainder offered employment until the closure date.

The shock in Drogheda was underlined by the fact that it is nearly a year to the day since Tellabs announced a $10 million (€10.9 million) investment in Drogheda and that it needed to recruit another 150 staff.

The change in the industry could not be predicted and was dramatic, according to Mr John Kohler, senior vice-president of Tellabs global manufacturing division.

"This dramatic change was felt by everyone and happened very quickly. It is a very sharp u-turn in the business. We have seen the revenue of our company drop sharply. We have also spoken to our customers who are experiencing similar situations which forced them not to order products as aggressively as they have in the past," he said.

Tellabs president Mr Richard Notebaert said it had to look to the long-term future, "as customers continue to reduce capital spending, we have less work for our employees and we must take difficult steps to preserve Tellabs long-term health."

As a result of the Irish consolidation, the switching systems and other products for the telecommunications industry which are currently made in Drogheda, will be transferred to the Shannon facility, where 450 people are employed.

The news was greeted with dismay by politicians in the region. The Minister for Social, Community and Family Affairs, Mr Ahern, a Louth TD, said: "My heart goes out to all of those about to lose their jobs, many of whom left other jobs with multinationals in the Dublin area to get closer to home in their local area."

The Tβnaiste, Ms Harney, said it was particularly disappointing given the recruitment drive announced last summer.

She is proposing to establish an inter-agency task force and "the main focus now will be to find a new investor and ensure the future employment prospects of those affected".

Although the Tβnaiste said she had been reassured that the Shannon facility would not be affected, Mr Kohler when asked whether there would be more cutbacks said, "we would like not to believe that and would like to believe that the future is very bright but at this point we don't know."

The consolidation of Tellabs operations in Shannon would position the Co Clare plant strongly for expansion if there is an upturn in the market, the managing director of Tellabs Ireland said yesterday.

Mr Pat Shanahan, who is also a senior vice-president of the company, said the Drogheda plant closure reflected a more-than-anticipated decline in revenues following a 10 per cent cut in its national workforce of 760 in April and the laying of f of 98 temporary staff in Shannon in March. "Our customers have not been spending as much as even predicted then," he said.

Tellabs, a Chicago-based, Nasdaq-quoted company, will only have one other European operation in Finland, following the Drogheda closure.

The announcement of yesterday's lay-offs will involve the transfer of 55 workers from Drogheda to Shannon, increasing the numbers there to 500.

About 35 of these will be staff involved in manufacturing with the remainder made up of research and design.Mr Shanahan added that Shannon, where Tellabs marketing, research and development, and manufacturing operations are now concentrated, would be well positioned if the recession in the sector ended.