Applied Materials continues workforce reduction and regional shift

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Applied Materials is implementing a major workforce reduction and regional realignment that will see a reduction in the number of employees of between 900 to 1,300, or about 6 to 9% of its global workforce. 

A year ago, Applied Materials employed approximately 13,000 regular workers and 900 as temporary employees on global basis. The major equipment supplier has been undertaking a long-term but had hoc geographical realignment of its workforce for over 10-years as increasing levels of manufacturing and therefore its customer base, across all major markets served – shifted to Asia and China in particular.

Most recently, Applied Materials announced it would be shifting production of its PV wafering equipment, formerly HCT, based in Switzerland to China, home to the largest wafer producers.

However, in mid-2010, Applied announced a plan to restructure its Energy and Environmental Solutions segment, with between 400 to 500 jobs to be lost globally, although due to improved market conditions, only 200 positions were eventually lost.

The company said that it would be starting a voluntary retirement program and other workforce reduction actions in the latest headcount reduction.

“Achieving our strategic objectives requires us to deploy our talent in the best way possible,” said Mike Splinter, chairman and CEO. “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 noted that the plan was expected to make available approximately US$140 million to US$190 million annually in financial savings that were said to then be used to fund ‘key growth initiatives.’

Applied said that it would incur aggregate pre-tax restructuring charges of around US$180 million to US$230 million, substantially all of which will be paid in cash.

The company had expected a reduction in capital spending, especially in the PV sector in 2012, though the severity of the overcapacity and financial distress on manufacturers has led to calls for Applied to sell-off its PV assets.

Applied indicated that the cuts were on a global basis and didn’t provide details on a divisional basis to the expected attrition from the new workforce reduction plan. 

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