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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Katherine Derbyshire who wrote (57337)	12/13/2001 9:01:21 AM
From: BWAC	Respond to of 70976

<Except in the last upturn AMAT was so lean that they had some pretty serious problems ramping back up to meet customer orders. Having layoffs at the bottom is usually not a brilliant idea. AMAT certainly knows that, so the current layoffs suggest that they don't think this is the bottom. > Good point.

To: Katherine Derbyshire who wrote (57337)	12/13/2001 9:34:19 AM
From: Dr. Mitchell R. White	Read Replies (1) \| Respond to of 70976

Hi Katherine! Long time no chat. AMAT will be so lean on cost it will look plain ol' anorexic. <grin> The upturn staffing issue last time was compounded by several factors. First, it was a very rapid rise in orders; I'm not sure that will be the case this time, although I'm willing to be surprised. Second, that ramp hit right in the middle of the lowest unemployment our area has ever seen, with massive fighting between Dell, the IC makers, AMAT, and the public sector over the small labor pool. Very exciting, lucrative for some individuals, and not at all the situation now! Or, for that matter, for the next several quarters, as near as I can tell. The third factor is more problematic to assess. The issue is that most of the technical talent in this town that could be considered for employment by AMAT has already worked for them, at least once. At least that is true in a large fraction, enough so that it is the root of many "gallows humor" jokes hereabouts. (The same thing is true at Dell, by the way, although there the claimed number is three times for each employee.) In any case, there is some reluctance for these folks to go back to work for somebody who dumped them once. And I believe that such employees, should they go back, are more wary of their situation and less productive overall. This "hire and fire and rehire" effect is known other places as well, and the economic effects of it have been studied. Suffice it to say that companies that are quick to whack the workforce (as AMAT has been in the past) are increasingly seen as less desirable to work for in general. AMAT has been working to change this view of their company in the workforce, but it's a hard sell; especially after yesterday's announcement. Certainly any talk that "employees are our most important/valued resource" is now viewed with extreme skepticism. There are some who argue that paper clips are higher on the value list. There is a larger set of trends at work here too: Consolidation amongst chip makers, making demand for equipment softer (even on an upturn, I believe); commoditization of ICs at all levels, meaning there is less money available from chip makers for equipment, so they will run their machines longer and harder; AMAT is already so large in the space that there is little market share growth left for them (relatively speaking, of course). We can't overlook these, and they will make the next upturn very different from previous ones. Sorry for the ramble, but it's been a while since I got to "unload" on the boards. I've been muzzled because my wife still works at AMAT (I think; I'll know later today). Slightly OT, I came within a hair's breadth of going to grad school at UCSB, in chemistry. Nice program there! But the mountains stole my heart, and I wound up in Salt Lake City. No regrets... Mitch