Kemet Announces U.S., Mexico Cuts
Kemet Says It Will Cut About 14 percent of Its Work Force in U.S. and Mexico
GREENVILLE, S.C. (AP) -- Kemet Corp. (NYSE:KEM - news) said it will cut about 14 percent of its work force in the United States and Mexico because of an industrywide slump in demand for its electronic parts. The company employs nearly 12,200 workers worldwide.
About 652 manufacturing and support workers will be laid off at its Simpsonville, Fountain Inn, Mauldin and Greenwood plants in South Carolina. An additional 1,130 jobs will be cut in Mexico and 23 in Shelby, N.C., company spokesman John Warner said Monday.
``We regret the hardship this action will have on the affected employees,'' said Larry Sheppard, vice president of human resources. ``We will be taking steps to minimize the impact on employees, including providing separation benefits and assisting in their search for other employment.''
The layoffs, which are effective June 30, will cost the company $2.2 million in the second quarter, but will reduce expenses $36 million.
``The electronic industry is cyclical and we usually go through this cycle every three years,'' Warner said. ``Unless the business of our customers picks up, they won't buy our capacitors.''
In 1998, Kemet downsized nearly 1,450 workers, including 530 in Greenville County, because of decreased demand for electronic capacitors.
Electronic capacitors store and release electricity and are bought by the billions by companies like Intel (NasdaqNM:INTC - news), Hewlett-Packard and Compaq for devices ranging from cellular phones to computers.
``There is a growing consensus in the electronic industry that, while shipments will ultimately return to long-term sustainable rates, the recovery will take longer than previously estimated,'' said David Maguire, Kemet chairman and chief executive.
Kemet is the world's largest manufacturer of solid tantalum capacitors and the nation's second-largest maker of multilayer ceramic capacitors.
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