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March 19, 2015

ESI to shutter Chelmsford plant, lay off 45

Portland Ore.-based Electronic Scientific Industries Inc. (ESI) is leaving Chelmsford as part of a corporate restructuring aimed at improving operational efficiency, which also includes laying off 45 employees.

This week’s announcement comes about 15 months after ESI moved an assembly plant and development center to Elizabeth Drive in Chelmsford from its former location in Bedford.

Closure to save $4.5 million annually

ESI, which makes laser-based manufacturing products for the microtechnology industry, purchased the business from Bedford-based GSI Group two years ago and moved it to Chelmsford in December 2013, said Brian Smith, director of investor relations at ESI.

But by the end of December, the plant will cease operations, according to a statement issued to investors on Monday. ESI said the corporate restructuring “will streamline its manufacturing and development operations,” and that production formerly housed in Chelmsford will be relocated to other corporate facilities.

The company expects to save about $4.5 million annually once the changes are implemented in the third quarter which ends in December, the company said, but it will incur about $5.5 million in severance and facility-related costs.

It was unclear if all of the people being laid off are located in Chelmsford, as Smith declined to provide that information. But he said ESI’s Chelmsford workforce includes engineers, marketing professionals, and manufacturing technicians, according to Smith. He said a “subset” of employees who were laid off have been offered other positions within the company.

“While these moves are difficult, they are a necessary step in our revitalization plan to position us for future growth and profitability,” ESI CEO Edward C. Grady said in a statement.

ESI posted a $34.2 million operating loss in the fourth quarter that ended Dec. 31, according to a company filing, compared with operating income of $6.8 million the previous year.

A 'vibrant corridor'

According to Chelmsford Town Manager Paul Cohen, town officials weren’t notified of the closure because the number of layoffs is small enough that the company isn’t required to notify officials. Cohen said the Elizabeth Drive location is in a prime location just off Route 3, and is centrally located between I-495 and Route 128.

The area is a “vibrant corridor” for high-tech companies of all sizes, Cohen said, and it has been for a generation, beginning with a boom in the 1980s when the Wang Towers in Lowell housed the former Wang Laboratories, causing high-tech companies to flock to the area in droves.

Today, Chelmsford is home to large technology companies such as Mercury Systems, a defense contractor, and Kronos Inc., a workforce management software company.

“My guess is someone will soon occupy that space with a similar type of use,” Cohen said.\

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