Shares in Bookham Technology have slumped by almost a quarter after the firm became the latest telecoms related firm to warn on profits.

Bookham stock, which topped �50 in August, hit 211p after the optical chips company warned it was being hit by "continuing inventory correction by customers".

The Oxford-based company, which has already shed about 150 of the 978 staff it employed at the start of the year, revealed it was to axe another 100 manufacturing jobs in an effort to cut costs.

And Giorgio Anania, the firm's president and chief executive, hinted at further cutbacks.

"We continue to look carefully at our cost structure, especially in manufacturing," he said.

The announcement is the latest in a series of blows to hit firms supplying the telecoms sector, coming hours after German chipmaker Infineon warned of a 30% drop in sales.

Shares in optical fibre giant Marconi hit an all-time low on Wednesday over concerns about the sector's prospects.

Sales down

Bookham, which spent a spell last year as a member of the FTSE 100 elite of UK listed companies, said sales for the May-to-July quarter would come in 45-55% below those of the three months before.

The firm had previously forecast a decline of 24-40%.

And the firm was unable to guarantee an immediate improvement in its operating performance, saying that short-term visibility in Bookham's marketplace "remains poor".

However, the firm was receiving "plenty of work" from customers incorporating Bookham technologies into products.

"We are seeing good progress in this area," Mr Anania said.

The firm is confident that long term prospects for its products "remain strong".

Bookham shares had recovered slightly by the close of the London markets to 232p, down 47p, or nearly 17%, on the day.