SANTA CLARA, Calif. -- Applied Materials Inc. here today announced it will reduce its global workforce by 10%, or 1,700 positions, in response to the continuing downturn in the semiconductor industry.
The Santa Clara company said it plans to begin notifying employees of the layoffs on Thursday. A total of 450 positions will be eliminated at Applied's operations in Silicon Valley and 600 jobs in Austin, Tex., the company said.
Employees in other groups will be offered the option of participating in a furlough program, an unpaid leave of absence during which they will be eligible for certain employee benefits.
A month ago, Applied Material executives said they were expecting a 20% sequential drop in revenues in the current fiscal quarter and a possible "small loss" in the period because demand for chip production systems remained weak. In a conference call with analysts last month, Applied managers said economic uncertainty resulting from the Sept. 11 terrorist attacks in the United States and weaker market conditions had delayed the potential for recovery in the chip industry, causing some 300-mm wafer fabs to be postponed (see Nov. 15 story).
"Unfortunately, the continuing downturn requires us to make some tough decisions to align our operations with current levels of demand for semiconductor equipment," said James C. Morgan, chairman and chief executive officer of Applied Materials. "While the short-term business environment is uncertain, we are confident in the long-term prospects of our industry," he said.
The move represents the latest in a series of cutbacks at Applied, which announced the layoff of 2,000 workers in September (see Sept. 20 story). Earlier this year, Applied reduced its headcount by 1,000 positions with a voluntary severance program (see March 15 story).
The world's largest supplier of semiconductor equipment has also implemented several cost-saving programs in response to the slowed demand in the semiconductor and equipment industries, including executive and employee salary reductions, restricted hiring and travel, mandatory shutdown days, a voluntary separation plan and a reduction in the regular and temporary work force.
Applied said it will record a restructuring charge in its fiscal first quarter, which ends Jan. 27.
