The fab tool giant is cutting jobs in Europe and the United States, but it is still hiring in China, analysts said. The company releases fourth-quarter earnings today.

Pacific Crest Securities, RBC Capital and Auriga USA LLC are predicting job cuts of as much as 15 percent at Applied, according to Bloomberg. That report can be read here.

''We think that the magnitude of the cuts may be more muted. We were earlier calculating up to 2,000-2,500 headcount reductions based on achieving 2008 EPS and 25 percent operating margin on 2010 revenues,'' said Barclays Capital analyst C.J. Muse.

''Now, with our calculations based on an improvement in economic trends and hence consensus revenue estimates for Applied (our estimates have gone from $5.6 billion in August of 2009 to now around $6.8 billion) we think that only 1,000-1,200 personnel are likely to be affected,'' Muse said.

''On the product side personnel reductions, we understand that the focus will be primarily on etch, metrology & inspection (PDC based in Israel), and thin-film solar. Lastly, some of the announced re-org/layoffs such as those of European personnel in crystalline silicon related solar equipment (Switzerland) and the re-org in LED business unit have already taken place,'' he said.

''We think restructuring will largely be focused on FPD/ Gen 8.5 PECVD for solar manufacturing (i.e. partly in Austin, Texas, though we expect that the upturn in semis will reduce the number of personnel affected) and business development, some management and service areas, with cuts approaching 15-20 percent of the personnel,'' he said.

''In the product divisions that are profitable, we do not see more than about 10 percent cuts, given that the semiconductor equipment side is in an upturn,'' he said. ''Also, we think that the return of GlobalFoundries into the order book in 2010 should suggest a significantly reduced contraction in PDC division because Applied is overrepresented in metrology and inspection at that customer. Also, the fact that Nanya and Inotera now are influenced by Micron should help Applied PDC as well.''

Applied is hiring in some areas. ''All this said, Applied remains aggressive in staffing its Xian, China solar R&D complex and its Tainan FPD and thin film solar PECVD manufacturing unit, which in retrospect should explain why we think that FPD manufacturing might be affected,'' he said.

And the news is not all doom-and-gloom. Citing a rebound in all segments, including the fab tool arena, Applied is expected to report earnings of $0.04 per share on sales of $1.3 billion, Muse said.

Wall Street is looking for $0.03 a share on sales of $1.31 billion.

Late last year, Applied Materials Inc. reduced its global work force by 12 percent after its GAAP net income for the fiscal fourth quarter fell by more than 45 percent year-to-year.

Earlier this year, Applied said the company would cut a total of 2,000 or more jobs. This is 200 more than expected.