Applied Materials to cut workforce up to 9 percent
SANTA CLARA, Calif. (AP) — Applied Materials Inc., facing a sputtering economy and weak demand for its chip-making equipment, said Wednesday that it is cutting its workforce by up to 9 percent.
The announcement came after the Santa Clara, Calif., company reported in August that its quarterly profit fell by more than 50 percent. At that time it also issued a forecast for the current quarter that fell well below Wall Street's expectations.
Applied Materials said it is offering a voluntary retirement program and taking other actions that will reduce its headcount by 900 to 1,300 around the globe. That represents about 6 to 9 percent of its workforce.
It said that it will first seek voluntary retirement. The number of layoffs will be determined afterward.
The company expects the reductions will free up $140 million to $190 million each year to help pay for its efforts to grow the business.
"Achieving our strategic objectives requires us to deploy our talent in the best way possible," Mike Splinter, chairman and CEO, said in a statement. "We are taking action to realign our worldwide organization and workforce while investing in key product development capabilities that will enhance our ability to grow."
Applied Materials expects to complete the process by the end of July 2013.
It expects to book $180 million to $230 million in restructuring charges tied to the workforce reductions. It will begin recording the charges in the fourth quarter of fiscal 2012 and expects that the remainder will be booked during fiscal 2013.
Applied Materials announced the measures after the close of trading Wednesday on Wall Street. Its stock was unchanged in after-hours trading after ending the regular session down a penny at $11.16.
The stock has lost 20 percent of its value since February when it hit its 52-week peak of $13.94.