Continuing price erosion and weak orders, particularly in its home European market, dampened quarterly sales and earnings for Epcos AG, forcing the Munich, Germany component supplier to slash 300 jobs as part of a cost-cutting program.
The job cuts, slated to take place next year, affect mostly Epcos's operations in Germany. They will be offset partly by new jobs in Asia as the company transfers production facilities there.
With orders declining and pricing pressure still intense, Epcos expects stagnant business for the time being.
"Epcos will therefore tailor its cost structure to deliver positive results even against a background of sustained economic difficulties," said Gerhard Pegam, Epcos' chief executive, in a statement.
The cost-cutting follows a weak fiscal 2002 third quarter where Epcos lost $9.1 million (9.3 million euros) on sales on $323.6 million (329 million euros). In its previous fiscal quarter ended March, Epcos earned $980,000 (1 million euros) on sales of $332.4 million (338 milion euros).
The company attributed much of the poor showing to a declining orders from the telecommunications and automotive industries.
Epcos has downgraded its fiscal 2002 year guidance, now projecting a pre-tax loss in the double-digit millions of dollars (euros) rather than the previous guidance of $49.2 million (50 million euros). Full fiscal 2002 year sales are projected to fall about 30% from last year's $1.87 billion (1.9 billion euros).