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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (6440)	7/11/2003 8:30:27 AM
From: Proud_Infidel	Read Replies (3) \| Respond to of 25522

Applied Materials CEO expected to thin management Friday July 11, 5:01 am ET By Daniel Sorid NEW YORK, July 11 (Reuters) - Michael Splinter, the new chief executive of microchip-making equipment leader Applied Materials Inc. (NasdaqNM:AMAT - News), is expected make make his first big mark on the company this month by targeting management as part of plans to cut 2,000 jobs. The company said it would eliminate the jobs in March, a month before Splinter joined the company. While most of the cuts have been completed, at least two Wall Street analysts expect Splinter this month to remove some management ranks built up under the previous CEO, James Morgan, who ran the company for 27 years. Splinter, an Intel Corp. (NasdaqNM:INTC - News) veteran, faces a tremendous burden: turning around the largest semiconductor capital equipment maker amid the industry's worst downturn. Chip makers are spending around half of what they did just a few years ago on upgrading and expanding factories, as expectations for fast-growing computer and electronics demand haven't panned out. Applied is expected to bring in only $4.47 billion in revenue in the year ended October, down from $7.34 billion two years earlier, according to Reuters Research, a unit of Reuters Group Plc. Santa Clara, California-based Applied Materials had set plans to cut 3,750 jobs, more than 20 percent of its staff, in its current fiscal year ending in October, slimming the company amid "a new reality" for chip equipment makers, in the words of former CEO James Morgan. Company spokesman Jeff Lettes said the company plans to finish the cuts by the end of October, but declined to specify whether management would be a focus of the remaining cuts. Wall Street analysts at J.P. Morgan and Banc of America have made nearly identical predictions, citing their contacts within the Santa Clara, California-based company -- that the company will push through the rest of the March round of 2,000 layoffs sometime this month, perhaps as early as July 22, and that management is the target. "We're probably expecting around 800 to 1,100 headcount reductions, with a focus on senior management," Banc of America Securities (News - Websites) analyst Mark FitzGerald said. "There's no doubt in my mind." Jay Deahna, the J.P. Morgan analyst, has said he expects Splinter to eliminate layers of management, setting as few as five to seven levels between CEO and low-level workers, and that a "management shakeout" may have begun. Deahna said that as many as 1,400 jobs could be cut in the latest round this month, a prediction that suggests Applied Materials could go beyond the 2,000 cuts it announced, since the company has said more than half of the job cuts have already been implemented. Deahna said he expects Applied to stick with its 2,000-job target, an assertion confirmed by spokesman Lettes. "It's not totally clear to us how much of that is incremental, and how much of that is part of the previous restructuring announcement," Deahna said. The company, he said, "articulated to me that they believe that the majority of it, if not all of it, was factored into the previous restructuring."