TEL Cuts 1,000 Jobs
-- Reed Business Information - US, 5/12/2003
Electronic News via NewsEdge Corporation : As it expected, Tokyo Electron Ltd. today announced a 1,000-employee layoff on its fiscal year results.
TEL had announced on April 3 that it might face cuts as a reaction to the poor world economy and conflict in Iraq. TEL today held to those concerns, saying that it expects a recovery of semiconductor-related capital investment to get under way in the second half of fiscal 2003, but that the world economy remains uncertain.
"Based on this recognition, we think there is a pressing need for us to implement measures to establish a business structure that would be more profitable even if net sales remained at the current level," TEL said in its financial statement. "To this end, as a part of the restructuring measures already decided, we intend to consolidate manufacturing and development operations worldwide, thereby cutting fixed costs by reducing the workforce group-wide by approximately one thousand, and at the same time we will take action to optimize the organizational structure, including the reshaping of group companies."
TEL expects the semiconductor and semiconductor manufacturing equipment industries to continue to grow over the mid- to long-term, while seeing normal silicon cycle fluctuations. However, the company said there is a "global shakeout among the contenders in those industries" coming. Implementation of measures like the workforce reduction, TEL said, will strengthen its business structure to keep it in the game.
For the year ended March 31, net sales increased 10.2 percent from the previous year to about $3.86 billion (461 billion yen) on a net loss of $347 million (41.5 billion yen), more than twice what was recorded in the year ended March 31, 2002. Furthermore, as the company predicted earlier this month, an extraordinary loss of $173 million (20.6 billion yen) was recorded for restructuring costs.
"Despite expectations that a recovery of semiconductor-related capital investment will get under way in the second half of fiscal 2003, the state of the world economy remains a source of uncertainty," TEL said. "In these circumstances, we are implementing restructuring measures to thoroughly reduce costs, and we expect to signal restoration of profitability by reporting income before income taxes on a consolidated basis. However, we forecast a net loss attributable to income taxes and income tax adjustments." |
