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Jabil Cuts 150 Workers In St. Pete; SEC Probe Ends

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By RICHARD MULLINS | The Tampa Tribune

Published: November 25, 2008

TAMPA - St. Petersburg-based electronics maker Jabil Circuit Inc. has some good news and bad news this week.

The bad news: Jabil will lay off another 150 workers locally in administration and manufacturing over the next few weeks amid slumping demand for electronics worldwide. This comes after 120 layoffs this summer, bringing Jabil's local employment to about 2,000.

The cuts cast a pall over a $37.6 million incentive package St. Petersburg and the state promised Jabil in exchange for not relocating, building a new headquarters in St. Petersburg and adding 850 more jobs over the next four years.

Jabil executives did not say they are backing out of the deal, but they offered new doubts on how it would unfold.

"We do not have any official update on that package," spokeswoman Beth Walters said. "That said, we have to look at what the overall environment is and not forge ahead recklessly if things deteriorate and continue to get bad."

Jabil has not received any payments from the incentive package, and any future payments would be tied to actual jobs created, Walters said. The company's preference remains the construction of a new headquarters and expansion of its operations in St. Petersburg.

On another front Monday, the Securities and Exchange Commission ended a years-long probe of how Jabil executives handled their stock options, ending another legal challenge that had dogged the company.

SEC officials in the Division of Enforcement sent Jabil a letter saying its investigation "has been completed" and "we do not intend to recommend any enforcement action."

Such letters are rather rare, as the government has no formal obligation to tell a company it decided not to pursue prosecution. A series of companies suspected of back-dating stock options to artificially boost their value have started receiving such closure letters.

Jabil spent "tens of millions of dollars" on its own investigations and on defending itself against such probes, Jabil general counsel Robert Paver said.

"There's clearly a sense of relief," Paver said. "But there's also a sense of injustice about the amount of management time and shareholder money spent as a result of this."

Reporter Richard Mullins can be reached at (813) 259-7919.

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