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Bookham Ships More Jobs to China

Bookham Inc. (Nasdaq: BKHM; London: BHM) is transferring more jobs to China from the U.K. as part of its ongoing cost-cutting strategy, it told its staff this morning.

In its latest cull of British staff, the optical components vendor is shifting 150 jobs related to its Chip on Carrier manufacturing process from Paignton, England, to its Shenzhen plant, which was opened last year. The move is part of Bookham's restructuring plan designed to reduce quarterly operating costs by up to $20 million. (See Bookham Adds to Layoffs.)

The news might cheer investors -- though obviously not the British staff -- as it will help stem some of the operating costs associated with running two parallel sites. "The company has so far made substantial progress in moving assembly and test operations to the Far East site and has seen positive cost reductions," says the vendor in an announcement emailed to Light Reading. (See Bookham Still Bleeding and Bookham, Avanex Shore Up.)

However, Bookham says it still needs to enter a 90-day consultation process with staff, starting today, and that the jobs transfer process will take about 9 months.

That's not the end of Bookham's operations in Paignton, though, as the company is retaining a research and development team of about 200 there. "The company expects this renewed focus on research and development and Bookham’s ongoing development of various global support teams to result in a more sustainable future for the site," says the company.

That sustainable future also involves finding new revenue sources, as the company is still heavily reliant on business from Nortel Networks Ltd. (NYSE/Toronto: NT). (See Bookham Soars on Nortel News.)

In its latest quarterly results, for the three months ended October 1, the company said it had increased revenues from "our non-Nortel business" as well as from its main customer. (See Bookham Posts Q1.)

But CEO Giorgio Anania also noted that Bookham expects that "revenue from Nortel will decline over the next three quarters as we reach the end of our last-time buys in the current agreement. However, we expect to expand business with our non-Nortel customers over the coming quarters and achieve additional improvements in our cost structure through the ongoing move to China."

New business announcements will therefore be eagerly awaited in the coming months.

Bookham's share price closed Tuesday at $4.74, giving the company a market valuation of $214 million.

— Ray Le Maistre, International News Editor, Light Reading

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digits 12/5/2012 | 2:51:36 AM
re: Bookham Ships More Jobs to China Bookham's share price is up by 15 cents, more than 3 percent, to $4.89 on today's news.
palaeozoic 12/5/2012 | 2:51:35 AM
re: Bookham Ships More Jobs to China
...and not fall prey to political newspeak when writing articles such as this. No jobs moved to China. Rather, another organization was willing to perform the work for less money.

When I buy a product from Walmart rather than Sears, I don't move jobs from Sears to Walmart. I take advantage of a supplier willing to meet my needs less expensively. That is my prerogative. If someone at Sears becomes unemployed that's tough.
paolo.franzoi 12/5/2012 | 2:51:33 AM
re: Bookham Ships More Jobs to China
Not true and there is a difference.

You walk up to Sears and Walmart and compare prices on the same product.

In the UK, you had a staff working on things. In order to save cost, you decided to hand the work to people that live in China. These people are not yet your employees.

To give a retail analogy, you would walk into Sears and get there price. Take this price to Walmart and say "If you will start selling this product, I am willing to pay x% of what Sears is selling it for now."

seven
pordionis 12/5/2012 | 2:51:32 AM
re: Bookham Ships More Jobs to China Actualy, my friend, calling the process of moving jobs to China by the pretty globalist name <the been="" given="" have="" operations="" to=""> "another organization that was willing to perform the work for less money" is the real newspeak.

In stead of the horible reality - a company brutally displaces its workers with foreign cheap labor - your sugested ineptitude creates a impresion of fairness and induces the idea that this process is natural and should happen all the time.

Oh and btw, if your needs are met at Walmart. then you got a problem.A chinese problem...
</the>
palaeozoic 12/5/2012 | 2:51:31 AM
re: Bookham Ships More Jobs to China Good. I figured this would light a fuse or two.

Compete or die. Doesn't matter whether it's outsourced work to a foreign contry or a more efficient retailer. Work will always flow to where it can be most economically performed. Only France is trying to prove that it can avoid this reality and it will eventually fail.
chook0 12/5/2012 | 2:51:27 AM
re: Bookham Ships More Jobs to China I'm not prepared to pay somebody more to do something just because they are British. That's fair.

Seems you see "foreign" and "cheap" as being bad. The first is discriminatory and the second is pretty silly if you are the customer....

--Chook
whyiswhy 12/5/2012 | 2:51:27 AM
re: Bookham Ships More Jobs to China ...and compete the way the Chinese compete.

Set the value of the dollar externally very low, accumulate everyone elses script as they rush to buy from us.

When they run out of cash, loan them back some of their cash, and buy their real estate and politicians with the rest.

-Why
javaos 12/5/2012 | 2:51:26 AM
re: Bookham Ships More Jobs to China I am suprised 150 jobs even made to the news while in the past 2 months:

Microsoft to invest $1.7 billion in India
http://news.com.com/Microsoft+...

Intel to invest $1 billion in Indian operations
http://news.com.com/Intel+to+i...

Cisco to inject $1.1 billion in Indian operations
http://news.com.com/Cisco+to+i...

JP Morgan to double India staff
http://go.reuters.com/newsArti...
chipthecat 12/5/2012 | 2:51:25 AM
re: Bookham Ships More Jobs to China So it's bonuses all round then?
Well . . . all round Giorgio and his best mates, I'm sure.
DZED 12/5/2012 | 2:51:25 AM
re: Bookham Ships More Jobs to China Is this the end of UK optics manufacturing?
Is there anything significant left?

The DTI has allowed Bookham to asset strip Marconi and Nortel Optical components. The billions of government and private investment has been effectively handed to the US and China on a plate.
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