Along with restructuring moves announced in January, the steps will result in charges of up to $1.1 billion, Chief Financial Officer Mark Greenquist said in a conference call.

Agere shares closed at $1.69, up 12 cents, or 7.6 percent on the New York Stock Exchange. Their 52-week trading range is $1.55 to $6.30.

Agere (NYSE:AGRa - News), whose optical components are used in fiber-optic cable networks that transmit data at the speed of light, has been hammered along with the entire network gear market by a dramatic slump in telecommunications.

"Reality has set in that the telecommunications market is not going to recover for some time," said SG Cowen analyst Mark Grossman. "If there's a silver lining, it's forcing companies to ... rationalize operations to sensible levels."

Grossman said optical components are Agere's weakest business. He rates Agere shares as "buy." SG Cowen has worked with Agere on stock and note offerings.

The company said it plans to cut its work force from 11,200 to 7,200 by the end of 2003, close a number of factories and consolidate its U.S. manufacturing in Orlando, Florida.

Agere, a spin-off of Lucent Technologies Inc. (NYSE:LU - News), said the steps would allow it to break even on an operating basis on quarterly revenue of $500 million in the second half of 2003.

Agere, which has a current break-even point of $700 million, posted sales of $560 million in the quarter ended in June. Of that total, 10 percent came from its optical components business.

Greenquist told Reuters in a phone interview that Agere should achieve the break-even target if there is not a further decline in telecommunications.

"If there is any kind of recovery, then there should be upside," resulting in a profit, he said. "There's nothing out there now to make us think it's going in a bad direction."

Agere said it expects total reorganization costs of $1 billion to $1.1 billion, including $430 million in cash and pension charges and non-cash write-offs.

The credit-rating agency Standard & Poor's said the news would not affect its rating or outlook on Agere.

Agere executives said in the conference call that the current quarter would not be affected by restructuring charges. The timing of the charges depends on working out the timing of the optical exit with customers.

Agere said in January it expected cash charges of up to $350 million, pension charges of up to $80 million, and non-cash charges of up to $250 million for restructuring steps including layoffs and closing certain plants.

On Wednesday the company said it would try to sell its optical components business and would close it down by June 30, 2003, if no buyer was found.

"Service providers are reducing capital expenditures and are reluctant to deploy any equipment that does not add to their business immediately," Agere President and Chief Executive John Dickson said on the conference call. "This has cascaded down to equipment makers and ultimately affects component makers like Agere."

The company said it plans to focus on components for short-range wireless networks and data storage products.

Agere expects to close or sell facilities in Dallas, Texas; Alhambra and Irwindale, California; and Matamoros, Mexico. It also plans to move its Allentown, Pennsylvania, manufacturing operations to Orlando by the end of September.

Agere is trying to sell its Orlando plant. If it cannot find a buyer, it will operate the plant until at least September 2004, it said. If a sale takes place, Agere expects the buyer to continue to build its products.

Agere said it would maintain its assembly and testing plants in Thailand and Singapore as well as a joint manufacturing venture with Chartered Semiconductor Manufacturing Inc. (NasdaqNM:CHRT - News).