Plexus Corp. posted rising losses in the just ended quarter and will take further cost-reduction steps, including job cuts and facility closures, as part of plans to return its operations to profitability.
The EMS provider said it will close its Kentucky plant and shift production work at the facility to other sites in the United States and Mexico, lay off 400 employees or 8% of its workforce, and reduce its global manufacturing footprint by more than 20% to 1.4 million sq. ft.
"These actions should result in approximately $6 million to $8 million in annualized cost savings," said Gordon Bitter, chief financial officer of the Neenah, Wis., EMS provider, in a statement. "We expect to record the restructuring charge in the third fiscal quarter and begin to see the benefits in the fourth quarter."
The cuts planned by Plexus will affect the company's engineering and corporate workforce, according to Dean Foate, president and chief executive.
The company said it will also re-focus its printed-circuit board design group and take a $12 million charge in connection with the reorganization.
Plexus' cost-cutting announcement follows another poor performance at the contract manufacturer.
In the fiscal 2003 second quarter ended March 31, the company's net loss widened to $5 million, or 12 cents a share, from $2.2 million, or 5 cents a share, in the year-ago quarter.
Revenue in the recently ended quarter fell 18%, to $190.8 million, from $231.2 million in the fiscal 2002 comparable quarter.