Naperville's Tellabs cut 280 jobs, reports big loss

Telecommunications equipment maker Tellabs Inc. announced Tuesday that it plans to lay off 280 workers to help reduce expenses.

At the same time, the Naperville-based company reported a third-quarter net loss of about $999 million, or $2.51 a share. Revenue fell 7.4 percent to $424 million and sales this quarter will be flat from the previous period, according to the company.

Most employees affected by the cuts will be notified this week, while the others by 2009, said Tellabs spokeswoman Ariana Nikitas.

Some of the job cuts are a result of the company's decision to reduce product development in its access business, Nikitas.

"Others are related to cost-cutting measures," she said. The company, with 3,500 employees, would not say how many of the cuts will be at the Naperville global headquarters.

Tellabs, which is a supplier to major phone companies like AT&T Inc. and Verizon Communications Inc., has said its customers aren't as enthusiastic now about the rollout of new wireless and video services as they were a year ago.

"Business is slowing down on the carrier side," said David Weissman, senior telecom analyst with Chicago-based Zacks Investment Research.

He points to a leadership change made at Tellabs about eight months ago as well. Naperville resident Robert W. Pullen, a 23-year veteran of the company, was tapped as CEO replacing retiring Krish Prabhu.

"He's from within. He has a good feel for what the carriers are looking for," Weissman said.

In addition to weaknesses in the industry, Pullen is facing tough economic conditions, Weissman said.

Tellabs was faced with costs of $988 million from writing down the value of the broadband business, which helps clients package Internet and phone services together, as well as the unit that manages voice traffic. The company is examining whether to decrease the book value of other units, Pullen said in a statement.

hares of Tellabs fell .46 or 11.76 percent Tuesday to close at $3.45.