GTAT laying off 40 N.H. workers in worldwide layoff
Nashua-based GT Advanced Technologies is laying off about 40 employees in New Hampshire as part of a 25 percent reduction in its worldwide workforce.
The move was made, the company said Wednesday, in order to better face a "challenging 2013." But instead of shoring up investor confidence, the news initially caused the company's stock price to plummet, though there was a bit of a rebound later in the day.
The company's workforce in Asia felt the bulk of those layoffs – about 30 percent — spokesperson Jeff Nestel-Patt told NHBR, but about 40 employees at the company's facilities in Merrimack and Nashua will be losing their jobs as well.
Nestel-Patt said that the cuts occurred over the past few days.
On March 31, the company employed more than 650 full-time employee equivalents — about 250 in New Hampshire, primarily at its Merrimack production facility, but also at its Nashua headquarters. Roughly 200 workers were elsewhere in United States (about 100 of those in Salem, Mass.) and another 200 were in Asia.
GTAT would save about $13 million with the layoffs, though that would be offset at first by $4.2 million in restructuring charges this quarter. Yet GTAT would still meet the low end of the $110-$140 million revenue forecast for the last quarter – which will be reported on Nov. 6."It is becoming increasingly clear that some of our Asian customers are experiencing severe financial difficulties brought on by a number of economic and trade related challenges," said Tom Gutierrez, president and CEO. "We are not immune to these headwinds, and we are taking actions to prepare for what is likely to be a challenging 2013 in our core markets by lowering our cost structure and at the same time improving our ability and flexibility to make strategic investments in R&D, next-generation technology and diversification initiatives that we believe will drive future growth and the creation of shareholder value.
"GTAT had a history of strong earnings and revenue growth when it went public in the summer of 2008, despite the economic slowdown in general and in the solar industry in particular. But the company – which makes the furnaces that makes the materials for solar cells — has been able to diversify and now makes furnaces that produce sapphires used in LED lighting and mobile phone screens.
The LED industry has experienced a slowdown as well, however, and in August, it announced earnings for the quarter ending June 30 were down 28 percent company from the year before, with a net income of $14.76 million — about a third of what it earned during the same quarter the previous year.
If the revised forecast proves accurate, the company's revenues will be even lower in the last quarter, which could translate into GTAT's first-ever quarterly loss.
About a month ago, the company beefed up its "war chest" with a complicated bond issue that would position the company for a major acquisition or internal expansion to further diversify. And today it said it will consolidate its existing business units into a Crystal Growth Systems group, run by Dan Squiller, who will act as chief operating officer, freeing up Gutierrez to focus on more strategic planning.
This will enable the company to save on some redundancies, and make it more "flexible" and "nimble" said Nestel-Patt.
GT hired Squiller in July from PowerGenix, a battery technology producer, one of the technologies that GT wanted to get more involved in.
GTAT shares closed at $5.12 on Tuesday, opened at $4.76 Wednesday morning and dropped to a low of $4.03 before closing at $4.34.