Asyst cuts workforce by 15% amid IC slowdown
By Mark LaPedus
Silicon Strategies
12/09/2004, 6:53 PM ET
SAN JOSE, Calif. — In its second layoff within recent months, chip-equipment provider Asyst Technologies Inc. on Thursday (Dec. 9) said that it would reduce its workforce by about 15 percent amid a slowdown in the IC industry.
The cuts involve Asyst's "base business" and excludes its joint venture in Japan, dubbed Asyst Shinko Inc. As a result of the workforce action, the supplier of wafer handling products expects to incur one-time cash severance and termination charges of approximately $2 million in its third fiscal quarter ending Dec. 25.
Asyst (Fremont, Calif.) continues to evaluate facility-related restructuring actions that would provide additional cost savings and would result in additional restructuring charges in future quarters. It also anticipates ramping-down certain supply chain and administrative projects in 2005, which is expected to provide additional savings.
The actions are expected to provide annual expense savings of approximately $8-to-$9 million.
The moves reflect a slowdown in the IC industry, as well as the company's continuing transition of its business model. Over the last two years, Asyst has divested certain product lines and moved towards an outsourcing strategy in order to cut costs.
The company had around 1,200 employees two years ago. Now, it's less than half that figure, according to a spokesman, who said that the company reduced its workforce by about 15 percent.
"We have reached an inflection point in the evolution of our business model that allows us to implement long-planned adjustments to our expense structure," said Steve Schwartz, president and CEO of Asyst, in a statement.
"During the past two years, we have outsourced our manufacturing operations, introduced new products in all of our key product groups, and reorganized the business around a focused vision for automating semiconductor manufacturing," he said. "These activities have positioned us to implement this phase of the restructuring, which when completed also will contribute to lowering the ATI and consolidated breakeven levels."
Indeed, it's been tough sledding for the company. Despite tripling sales in its second fiscal quarter Asyst, a supplier of automation and material handling systems for wafer and display fabs, last August set plans to cut 10 percent of the company's jobs in second fiscal quarter (see August 4 story).
Last month, Asyst said that Asyst Shinko Inc. (ASI), the company's 51 percent-owned joint venture with Shinko Electric Co. Ltd. of Japan, has resolved a customer contract dispute that was delaying Asyst from filing its quarterly 10-Q.
Asyst said it had to delay filing because the Asyst Shinko had difficulty closing its books due to the dispute, which revolved around three flat panel display-related contracts with an aggregate value of $137 million (see Nov. 23 story).
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