Applied Materials lays off 2,000 workers

Applied Materials lays off 2,000 workers
SANTA CLARA, Calif.--Applied Materials Inc. today announced that it will layoff 2,000 employees, or 10% or its worldwide workforce, because of continued weakness in semiconductor capital equipment markets.

About 700 jobs are being eliminate by Applied in Silicon Valley and another 500 positions are being cut at the company's operation in Austin, Tex., where fab tools are built. Applied said the remaining job cuts will occur at operations worldwide by the end of fourth quarter, and employees are being notified today.

"We implemented a series of aggressive cost-reduction programs in an effort to avoid reductions in our work force. Unfortunately, the length and severity of the downturn and lack of near-term visibility have made it necessary for us to take additional action to align our operations with the current level of business," said James C. Morgan, chairman and chief executive officer at Applied Materials.

Until now, Applied Materials officials had hoped to avoid layoffs by making day-to-day cost cuts and improving productivity in manufacturing operations that produce 300-mm fab tools in Austin. During a conference call with analysts last month, Applied executives said rumors of layoffs were groundless. In fact, officials said there was growing evidence that the downturn was hitting its bottom in the current fiscal quarter (see Aug. 15 story).

But at this week's Semicon Taiwan trade show in Taipei, officials with the Semiconductor Equipment and Materials International (SEMI) trade group said there was no sign of a bottom to the industry's recession. The bleak outlook was issued by SEMI after the opening of Semicon Taiwan was delayed by the worst typhoon to hit the island in decades (see Sept. 19 story).

Applied Materials said it will record a restructuring charge in the company's fiscal fourth quarter, ending Oct. 28. The company did not issue an estimate on those charges.