MILPITAS, CA -- Solectron Corp., one of the world's five largest EMS companies, will lay off about 3% of its employees and take a restructuring and impairment charge of $35 million to $45 million. The company reported second-quarter sales of $2.90 billion fell 3% sequentially but rose 16% year-over-year.

The sales uptick was offset by the company's announced layoff of 1,300 and 1,500 employees over the next 12 months as part of a previously announced restructuring plan.

Solectron will also close or consolidate 400,000 sq. ft. of facilities, mainly in North America and Western Europe.

The company reported GAAP profit after tax from continuing operations of $15.6 million, up from $6.6 million in the first quarter and down from $17.1 million a year ago.

Non-GAAP profit was $41 million, down from $47.6 million sequentially and up from $29.7 million last year.

"During the second quarter we made progress in our efforts to drive growth, expand gross margins, and deliver positive free cash flow," said Paul Tufano, interim chief executive of Solectron. "As we begin the second half of fiscal 2007, I believe we are well-positioned to deliver continued improvement in profitability, working capital management and cash generation."

Solectron guided for third-quarter sales of $2.90 billion to $3.10 billion.

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