Gene & All,
Bullish/bearish may be in the eye of the beholder and usually is.
Monday -- March 9, 1998
Applied cuts contract jobs
Temporary worker reduction 'substantial'
Neil Orman Austin Business Journal Staff
Applied Materials has "substantially" trimmed its temporary work force in Austin.
The semiconductor equipment maker has let about 300 contract positions
expire over the past several months, industry sources say. That slims its total Austin head count down to about 3,000 people.
Company representatives say it's hard to gauge how many temps the
company uses because Applied Materials has decentralized its human
resources department here into different divisions. The cuts have taken place over the past six to nine months.
Chip-related firms everywhere are troubled by weak Asian demand and a
global oversupply in semiconductor fabrication capacity, and Applied is no different. It has begun to feel the pinch in declining new orders. In its first quarter report issued Feb. 10, Applied said new orders had decreased 6.1 percent to $1.29 billion from $1.37 billion the previous quarter.
A local spokesman says the company's temporary work force here has
been reduced "substantially."
"This has been a gradual process," says Steve Taylor, a spokesman for
Applied Materials in Austin. "As contracts have expired, we haven't
replaced them."
Taylor could not provide exact numbers, but industry sources say around 300 temporary positions have been eliminated.
Applied Materials gets hundreds of workers on short-term contracts from temporary employment agencies.
Clark Fuhs, a market analyst with Dataquest in Mountain View, Calif.,
says most equipment companies are either cutting jobs or freezing hiring right now.
"[The Asian situation] has been the trigger that has made things come to a head in terms of a capital spending constraint," Fuhs says.
In its first quarter report, Applied revealed that a key Korean customer had delayed a major investment in a new memory chip plant in the United Kingdom.
"There is a high degree of uncertainty regarding the near-term economic health of these regions and the related effect on the demand for semiconductor capital equipment," says James Morgan, the chairman and CEO of Applied Materials, in the company's first quarter financial report.
Sales remain strong for the moment. In its same first quarter, Applied had record net sales of $1.31 billion, an increase of 56.5 percent compared with the first fiscal quarter of 1997. Net income rose $29.6 million to $228.9 million, or 60 cents a share, over last year's first quarter.
Staff Writer Matt Hudgins contributed to this story.
-----------
|
