Avnet's Vallee: Worldwide Layoffs Across All Businesses

"There were layoffs worldwide across all our businesses," Vallee says.

"We reduced staffing by about 1,000 on a base of 14,000."

Avnet, a large distributor of electronic components, has also announced that sales for the company have significantly dropped in the current quarter and it has recorded a $275 million pretax charge related to a recent acquisition.

Phoenix-based Avnet anticipated the fourth-quarter one-time charge from the completed $550 million acquisition of stock for Houston-based Kent Electronics. However, the per-share profit estimate was far below what analysts were expecting for the quarter.

"We're off from where we'd like to be," Vallee says. "We're down, but not catastrophically."

For the company's fourth quarter ending June 29, Avnet executives are projecting sales to be down between 25 and 30 percent. Third-quarter sales were $3.4 billion, which included the acquisition.

For the fourth quarter ending a year ago, the company recorded a net income of $66 million, or $1.48 per share. Analysts had reportedly been expecting a profit of 42 cents per share for this recent quarter, but, according to the company, earnings per share will be break even to a few cents positive.

"The vast majority of Avnet's decline in sales are related to its components business and the vast majority of it is related to inventory correction rather than economic decline," Vallee says. "It's the demand/decline that caused the supply/demand imbalance. For me, personally, it's more of an inventory correction than inventory decline."