National Semiconductor to lay off 25 per cent of workforce, close two factories
12 Mar 2009
Faced with a steep decline in sales, chipmaker National Semiconductor Corp. said Wednesday it will eliminate more than one-quarter of its work force, or 1,725 jobs.
The company said it would immediately begin trimming 850 positions worldwide in its product, marketing, manufacturing and support businesses. An additional 875 jobs will be lost with the shuttering of facilities in Suzhou, China, and Arlington, Texas, over the next few quarters. National Semiconductor has about 6,500 employees.
The Santa Clara-based company said the layoffs would cost $160 million to $180 million in severance and other charges, $130 million to $145 million of which will likely be recorded in this fiscal quarter. The company expects to save $120 million annually from these cuts plus the 330 layoffs it announced in November, according to a spokesman.
News of the job cuts arrived with the company's third quarter of fiscal 2009 earnings report. National Semiconductor reported income of $21.9 million, or 9 cents per share, for the third quarter of fiscal 2009. That compares to earnings of $72.9 million, or 29 cents per share, during the same period a year earlier. Net sales for the quarter hit $292.4 million, down from $453.4 million the year prior.
Sales this quarter will drop as much as 10 percent from the previous period as customers curb spending to cope with the economic slump, National said. The global economy may shrink for the first time since World War II as trade declines, according to a report this week from the World Bank. Companies such as Nokia Oyj, the world's biggest maker of mobile phones, use national's chips. (See: Global semiconductor capital equipment spending to decline 45 per cent in 2009: Gartner)
"The worldwide recession has impacted National's business as demand has fallen considerably," CEO Brian L Halla said in a statement.
National Semiconductor said it expects another 5 per cent to 10 per cent sequential decline in sales, which would put its fourth-quarter revenue between $263 million and $278 million. Analysts were expecting revenue of $293 million.