Zilog, Inc. today announced that it will cut 7% of its workforce due to slowing demand for its products. The chip company also said it expects fourth quarter 2000 revenues to decline approximately 15% from the third quarter of 2000, and that first quarter 2001 will decline approximately 10% from the fourth quarter of 2000.
A spokeswoman said that Zilog also is "in preliminary discussions" with American Microsystems Inc., Pocatello, Idaho, to sell Module 2 of its wafer fab in Nampa, Idaho. That fab uses 5-inch wafers.
"Increased inventory of micrologic semiconductors at the company's original equipment manufacturer customers and distributors has created lower than expected demand," the company said in a prepared statement. Regarding the layoffs, Zilog said that it "will restructure to use more resources for the development of the new products that are important to Zilog's future, particularly in the Communications market. The reduction in force affects both exempt and non-exempt employees.
"The company regrets that market conditions necessitate taking this step," said Curtis J. Crawford, chairman, president and CEO of ZiLOG. "However, it is prudent to align our resources with our needs."
Zilog employs about 1,300 worldwide, but the job cuts will fall most heavily at the Campbell, Calif. headquarters. Design centers in Seattle and Austin won't be affected, the spokeswoman said, and only about 11 jobs will be eliminated in Nampa.
All employees who are terminated in the reduction in force will receive severance pay, health benefits into 2001, and employer-paid outplacement assistance, the company said.
Zilog joins a long list of semiconductor company that have cut forecasts for earnings and revenues in recent weeks, but it is the first to announce a signficant cutback in staffing.