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The financial crisis gripping Asia has started to take a toll on the satellite industry in a dramatic demonstration of the global nature of the space-based telecommunications business. After well- founded rumors of a significant layoff at Space Systems/Loral {LOR} (SS/L) began circulating, the Palo Alto, Calif.-based spacecraft manufacturer issued a statement confirming that it will cut as many as 300 jobs during the next few months, a staff reduction of approximately 9 percent.
Meanwhile, U.S.-based PanAmSat Corp. {SPOT} hinted it may be planning to terminate a contract satellite construction with SS/L because of unspecified "performance issues," suggesting that more belt-tightening may be on the way. SS/L officials did not comment on PanAmSat's accusation, which appeared in a filing the satellite operator filed with the Securities and Exchange Commission.
SS/L, a unit of Loral Space and Communications, attributed the layoffs to a hiatus in the construction of three geostationary satellites for a pair of Asian companies, which have been stung by the troublesome economic conditions in the region. At our deadline, neither Hughes Space and Communications Co. {GMH} or Lockheed Martin Telecommunications {LMT}, SS/L's chief U.S. rivals, had announced job cuts.
Officials said SS/L has stopped work on the L-Star 1 and L-Star...