GT Advanced Technologies, the company that makes sapphire glass for Apple said that it will be cutting as many as 890 jobs and close down its Arizona plant; the plant the GT is looking to close down was expected to manufacture screens for Apple devices. When announcing the news, GT also said that it might even sue the Cupertino, California-based tech giant while recovering under bankruptcy.
In a statement issued on Friday, GT said that it will have to shut down the above mentioned operations for ceasing its growing losses and allowing its resources to refocus on its core business operations of making sapphire products such as furnaces. GT Advanced was losing almost $1 million per day at operations it has decided to close.
In its filing at the United States Bankruptcy Court in Manchester, GT said that it has a number of claims against the iPhone maker that stem from the partnership it had with the company. The sapphire glass manufacturer, however, said that it has no plan of pursuing any of those clams at the initial stage of bankruptcy; the unspecified claims will give GT the opportunity of terminating a number of Apple agreements, which are currently of no use and are burdensome.
The decision of GT Advanced to shut down its Arizona plant had a big impact on the market. Shares of GT’s rival company Rubicon Technology, another maker of sapphire structures, increased by around 23% to reach $4.93 on the NASDAQ Stock Market.
According to Andrew Abrams, a representative of JG capital, the current situation is suggesting that GT might wind down its sapphire operations, which would be real good news for the industry in general and also for Rubicon, which is one of the main suppliers.
All these speculations began after GT Advanced Technologies filed for Chapter 11 bankruptcy on Monday without any significant warning. The announcement of bankruptcy filing resulted in 90% fall in its shares; the event took the price of the company’s share below $1.
GT didn’t offer full details of the factors that forced it to file bankruptcy. Much information is also not available about its turnaround plans. On Friday, during the court filing, the company stated that it had to stop operations in Salem, Massachusetts and Mesa, Arizona quickly for preserving its decreasing funds. GT also noted that the entire shut down process will take around a couple of more months to complete.