January 7, 2009, 7:27 pm
ON Semi Issues Q4 Warning; Cutting 1,500 Jobs
Posted by Eric Savitz
And the crumbling of the chip industry continues.
ON Semiconductor (ONNN) this afternoon announced a series of cost reduction measures in response to crumbling demand. The company has cut its 2009 capital spending plan to a range of $50 million to $60 million, from a “normalized yearly” level of $130 million to $140 million. The company is also cutting 1,500 jobs, about 10% of its worldwide staff.
ON is accelerating planned factory closures, evaluating other locations with the objective of closing an additional location by year end, setting 4 to 6 week shutdowns in both the first and second quarters, requiring 3 weeks of unpaid time off for senior execs in both the first and second quarter, and requiring 2 weeks of unpaid time off or a 4 day work week for other employees in each of the first two quarters, effectively a 15% salary reduction.
The company also will give no merit increases this year and make no bonus payments.
ON also said it now expects Q4 revenue to be between $480 million and $490 million, a 16%-17% sequential decline, down from its October 30 guidance of $500 million and $559 million, or down 5%-14% sequentially.
CEO Keith Jackson said the revised outlook reflects “deteriorating conditions in the global economy.” Jackson said he expects “another challenging quarter” in Q1.
Whoa, Nelly. |
