-(BUSINESS WIRE)--April 22, 1998--National
Semiconductor today announced it is reducing its worldwide work force by approximately 1,400 people, or about 10 percent of total employment by a combination of involuntary reductions and attrition.
The reductions will center primarily on the company's Santa Clara
headquarters and include 560 employees affected by the previously
announced closure of the company's older 5- and 6-inch wafer manufacturing facilities at that location. Other worldwide sites will be affected to a lesser degree.
The company said that recent softness in the semiconductor market
combined with a corresponding decrease in new orders made it necessary to
reduce costs beyond the level of the previously announced phase-out of its
5- and 6-inch manufacturing lines. As announced March 12 in its third quarter
financial report, the company is forecasting the likelihood of a loss in the
fourth fiscal quarter.
Employees affected by the reduction will be informed individually starting
today and the company will provide outplacement services and severance
packages, including benefits coverage, based on length of service.
National said that it will report a one-time charge in its fourth fiscal quarter
ending May 31, 1998 of between $60 to $70 million pretax, equivalent to 27
to 32 cents in quarterly after tax earnings per share, to cover the costs of
severance and other cost reduction actions.
This one-time charge consists of approximately $25 million for severance and
lease terminations plus $10 million for asset write-offs related to
discontinued product development programs. It also includes approximately
$10 million for additional asset impairment for the Arlington, Texas
0.65-micron fab, plus an approximate $20 million write-down to fair value of
facilities and equipment to be disposed of in the Santa Clara 5-, 6- and 8-inch
fabrication lines.
Today's action is intended to help align current costs with anticipated
revenues and thus strengthen the company's competitive position. The
company said its business strategy continues to be validated by industry
analysts, customers and competitors. National recently announced its
timetable to develop a single-chip PC by mid-1999 and continues to invest in
new technology consistent with its strategic direction.
This announcement contains forward looking statements dependent on a
number of risks and uncertainties including such factors as, but not restricted
to, new orders received and shipped during the fourth quarter, the timely
ramp up of new submicron production facilities, the degree of factory
utilization, the successful sale of existing inventories, and the ramp up of
recently introduced products.
Other risk factors are listed in the company's Form 10Q for the quarter ended
March 1, 1998 (see the Outlook section of Management's Discussion and
Analysis of Results of Operations and Financial Conditions).
National Semiconductor Corporation produces system on a chip silicon
solutions for the information highway, based on its leadership in analog and
mixed signal technologies. National is headquartered in Santa Clara, Calif.,
and focuses on the communications, personal systems and consumer
markets.
National has annual sales of approximately $2.5 billion and 13,700 employees
worldwide. |
