Exclusive: SEMI implements cost reduction measures, including layoffs, pay cuts

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The most challenging economic conditions in recent memory have taken their toll on a leading semiconductor/solar trade association–the Semiconductor Equipment and Materials International. SEMI North America President Jonathan Davis told PV Tech/Fabtech in an exclusive interview earlier this week that because of what he called a “fairly severe decline in revenues,” the organization has taken a “number of cost reduction measures, including layoffs.”

“From our original 2009 budget, SEMI has eliminated a total of 31 budgeted positions, not all of which are currently filled,” he said. “Last week, SEMI laid off 25 individual employees…which brings the total headcount in SEMI’s 12 worldwide offices to 202 employees,” effectively an 11% workforce reduction. Davis characterized the layoffs as “widespread, they’re across the board, virtually every group in our organizational structure has been touched by this.”

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The job cuts are not the only cost-cutting efforts that SEMI has undertaken to deal with the downturn, according to the SEMI executive. “The action occurs with a number of other cost reduction measures, including pay cuts, we implemented a hiring freeze last fall, we’re not filling any vacated positions with our temporary employees or contractors. We’ve eliminated market adjustments or raises for the coming year, and we’re reducing existing compensation levels. The CEO’s salary has been cut by 20%, the executive team’s salaries cut by 10%, and the other staff will have salary reductions of 7%.”

“It’s a widespread action aimed at immediate cost control but we’re also trying to achieve a leaner organization in a way that will not too adversely affect our services and we can continue to pay very high attention to the quality and responsiveness in order to keep a high level of member satisfaction,” Davis explained.

“Along with the reductions in force come certain departmental realignments. These don’t constitute a change in our fundamental mission or fundamental orientation. When it’s clear that we have a significant proportion of our membership interested in adjacent market areas, we will deploy our conventional core competencies in standards advocacy, trade shows, executive conferences, and (market) information to help our members engage in those markets. Right now, photovoltaics is the strongest example of that.”

Several hundred member companies have “indicated either an interest or an involvement in the solar energy space,” he said, noting SEMI’s recent establishment of a dedicated PV Group and progress in the standards area.

As for the possibility of pulling the plug on any SEMI-sponsored conferences or shows this year, Davis said that “we don’t have anything (significant) that we see canceling at the moment. The attendance at our early events was down considerably. The ISS conference had paid attendance that was down almost 50%. We will keep a close eye on the conferences, but there’s a great likelihood we would proceed with events, even if they break even or don’t make their revenue targets.”

He did admit that there might be some “smaller, regional things that will thin out a bit. We have a lot of local activities, so a lot of those will be suspended for awhile, until things pick up again.”

Davis, a long-time SEMI employee who took over the North America region’s presidency from Victoria Hadfield a few months ago, see his charge as to “try and maintain the important, essential activities and look for ways to add value to the companies that choose to be members of SEMI for the long haul. Semiconductors will continue to be vital to the way we live, the way this planet operates. Business will return, and our global presence will be a big advantage.”

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