Tuesday, March 18, 2003
Leading chip equipment vendor Applied Materials said Monday (March 17) it will lay off 2,000 employees, or 14 percent of its workforce, and shut down many of its buildings and offices as hope for a revival in chip equipment sales dims.
Most of the affected employees—1,400 of them—work in North America while the remaining 600 are from various locations around the world. Most the affected employees will be released by the end of next month, company executives said.
Many of the employees to be let go work in customer support-related jobs, a move that reflects fewer chip makers buying equipment as the semiconductor downturn hits its third year. Moreover, as its customer base shrinks, Applied said it is scaling back regional sales activity and focusing more on large customer accounts.
The company said the restructuring would not result in changes to its overall product strategy. "The fundamental product groups have been established. It's more in the support areas that were impacted on the prioritization of investment," said James Morgan, chairman and chief executive of Applied, in a conference call with financial analysts.
Still, the company will review some of its product areas to see if they are aligned with customer needs. "Some programs will be accelerated and non-critical programs will be deferred," said Joseph Bronson, executive vice president and chief financial officer at Applied.
To further reduce costs, Applied said it will shut down 19 buildings and 30 offices at its campuses here and in Austin, consolidate its laboratories here and reduce the number of facilities outside the U.S.
By: DocMemory
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