Intel Investors - This doesn't look good - Intel will temporarily close two wafer fabs in Oregon - for 9 days around the holiday.
Here's the story.
Paul
{===========================}
news.com
Intel to shut plants
temporarily
By Michael Kanellos
Staff Writer, CNET NEWS.COM
July 1, 1998, 6:30 p.m. PT
Intel will temporarily close two of its chip
fabrication facilities for nine days beginning
this weekend, even as it starts a "voluntary
separation" program to trim back its
workforce.
The temporary plant
closure--to affect 1,700
workers--and the job
cutback program are
essentially aimed at
cutting costs in a
slower-than-expected
market, said Bill
MacKenzie, a public information officer at
Intel. Closing the fabrication facilities will help
reduce chip supplies, while the employee
separation program will work toward
reducing the overall employee headcount.
"Basically, we are responding to market
conditions," he said.
Earlier this year, Intel said it would lower
headcount by 3,000, but these latest
developments seem to indicate a growing
aggressiveness in cutting bottom-line costs.
Plant closures are relatively uncommon at
Intel and have not previously been discussed
publicly. Industrywide, however, several
beleaguered memory chip manufacturers
have enforced temporary shutdowns this
year in an effort to reduce oversupply
Similarly, the reduction of 3,000 employees
was originally going to be accomplished
mostly through attrition, not through
organized layoffs. But Intel is now offering
severance packages to rid itself of
employees. The company currently has
65,000 employees.
Some analysts have said that Intel will have
to increase the amount of cutbacks still more
if it's to get back on track. Intel is an investor
in CNET: The Computer Network.
Intel will temporarily shut plants 5 and 15 in
the company's Aloha manufacturing facility in
Oregon from July 4 through July 12,
MacKenzie said. Approximately 1,700
manufacturing employees will be sent home
without pay during this period.
"Warm downs" such as this are not unknown,
said MacKenzie, but not common either. He
could not recall other temporary closures
such as this in the past year in Oregon.
Plants 5 and 15 are used for the production
of chipsets, microprocessors, and other
products, MacKenzie said, but are not
cutting-edge facilities. Both produce silicon
based around the older 0.35-micron process
technology, although Plant 15 is being
refitted to handle the 0.25-micron process
technology.
The voluntary separation program will begin
next week. Under the program, Intel will offer
manufacturing employees severance
payments for leaving the company.
MacKenzie said details are still being
worked out. Sources close to the situation,
however, have said that Intel is considering
giving employees payments equal to up to
four months of their regular salary with
additional payments depending on years of
service and job title.
These terms would be similar to those
offered to some 650 employees Intel will lay
off from a Dupont, Washington, facility
beginning in August.
MacKenzie said that positions eliminated
through the separation program are part of
the effort to reduce headcount by 3,000, but
added that the total number of positions
affected could potentially exceed that
number.
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