GT Advanced Technologies today notified City Council members in Mesa, Arizona that it plans to permanently eliminate 727 jobs at its sapphire plant. Layoffs will include 524 production workers, 108 technical positions, 70 management jobs, and 25 administrative jobs.
Affected employees were notified about their impending layoffs on Thursday. Layoffs will start on Tuesday and employees will be "separated from employment" beginning on December 15, according to a notice provided by Linda Luman, GT's vp of human resources.
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News that GT would eliminate hundreds of positions first surfaced last week, after the company asked the court for permission to "wind down" operations at its Mesa, Arizona manufacturing plant. The facility, which was purchased and outfitted by Apple, has been operational for less than a year.
GT Advanced first filed for bankruptcy earlier this month, after Apple withheld a $139 million loan payment because the sapphire supplier failed to meet necessary technical milestones. According to court documents and securities filings, GT may have begun having issues with sapphire production as early as February.
Apple gave GT Advanced a $440 million loan for purchasing sapphire equipment, but according to information leaked during the GT's court proceedings, the sapphire company was unable to produce sapphire up to Apple's standards, leading Apple to stick with Gorilla Glass for the iPhone and the iPhone 6.
GT Advanced has plans to shut down its Mesa, Arizona plant, and it has also asked for court approval to void its contracts related to the operation, calling the terms of the contracts with Apple "oppressive and burdensome." The company will wind down operations over the course of the next few months, keeping on a small number of workers to monitor ongoing sapphire growth.
Once the current sapphire boules have been prepared for sale, employees will clean and decommission furnaces and then clean the plant itself, with a final closure coming on December 31. Apple has not commented publicly on the matter beyond its initial pledge promising to work to preserve jobs in the area.
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