Applied won't comment on reports of layoffs
Semiconductor Business News
(08/02/01 15:45 p.m. EST)
SANTA CLARA, Calif. -- Applied Materials Inc. today would not comment on local newspaper reports that it has begun quietly laying off workers.
A story appearing in the San Jose Mercury said the semiconductor equipment giant had laid off 100 employees from its total workforce of 20,000, but rumors continue to swirl about much larger layoffs at Applied. Depending upon the source, rumors place the potential layoffs between 10-to-20% of Applied's worldwide workforce.
A corporate spokesman today said he could not comment on reports or rumors because the company had entered into a "quiet period" after completing its fiscal third quarter in late July. Applied Materials' results will be posted Aug. 14.
So far in the current downturn, Applied Materials has managed to avoid large layoffs by reducing expenses with pay cuts, delays in merit raises, and shortened work schedules. The company also eliminated 1,000 jobs with voluntary severance packages several months ago (see March 15 story).
Applied is desperately trying to avoid "the hire-and-fire" cycle of past business cycles, said company manager at a briefing with financial analyst during Semicon West last month in San Francisco. However, Applied is now worried that a second phase in the current industry slowdown could put it under more pressure to consider layoffs as a last resort in cost cutting, said chief financial officer Joseph R. Bronson during the briefing.
But a new wave of capital spending cutbacks at semiconductor manufacturers has cause Wall Street to expect layoffs at Applied.
"Applied did not lay off as many people as we would have expected earlier in the current downturn and now has to play catch up," said a report this week from Morgan Stanley Dean Witter & Co. Until the latest rounds of capital-spending cuts by IC makers, Morgan Stanley was expecting Applied to report "breakeven or better results" throughout the remainder of the downturn without reducing its workforce. But now that is unlikely, said the brokerage firm. |
