Applied Materials slashes staff by 10 percent -- again

Faced with an ongoing slowdown in capital spending by semiconductor and flat-panel display makers, Applied Materials Inc. will lay off 1,700 workers -- or 10 percent of its total staff -- on Thursday. This is the second time in three months that the company -- which produces equipment used to make semiconductors -- has announced it would reduce its staff by 10 percent.

Global sales of semiconductor manufacturing equipment are expected to fall 38 percent in 2001 to US$29.6 billion, according to consensus estimates released by semiconductor trade group SEMI. Sales are expected to fall an additional 3 percent during 2002 to $28.7 billion before resuming growth in 2003.

Riding this downward swing in demand, Applied Materials plans to cut around 450 jobs at its California operations and approximately 600 positions at its operations in Austin, Texas. The company did not specify where the remaining 650 job cuts would occur. Some employees affected by the cuts will be offered the option of taking an unpaid leave of absence from the company during which they will be continue to be eligible for certain benefits, it said.

Applied Materials has tried several ways to cut costs, including pay cuts, restrictions on hiring and travel, plant shutdowns, and a voluntary separation plan.

In September, the company announced plans to lay off 2,000 employees, or 10 percent of its workforce at that time. Those cuts included the loss of 700 jobs from its operations in California; 500 from its Austin, Texas, operations; and 800 positions from other locations worldwide by Oct. 28.

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