Sipex Corp., a maker of analog ICs based in Billerica, Mass., said today that it will be reducing its workforce by approximately 15% due to the continued slowness in the semiconductor market.
The reduction in the workforce is primarily focused on manufacturing operations and administrative positions. In addition to the reduction in workforce, the company will be shutting down its manufacturing operations for an undisclosed period in the company's third quarter.
The additional charges of approximately $500,000 for severance will be taken in the company's second quarter of 2001. The expected savings associated with the reduction in workforce are approximately $1 million per quarter.
"In addition to the cost reduction, we anticipate a significant reduction in wafers run at outside foundries in the third quarter, resulting in approximately a 30% increase in internal production or a savings of approximately $3 million per quarter," the company said.
The company also expects to realize additional cost savings in its third quarter of 2001, resulting from the shut down.
"Although we have been encouraged by positive signs for our new products in the telecommunications and optical storage business, the continued softness and lack of visibility within our core business has led us to take stronger actions to manage our costs. We expect that these steps will enable us toalign our costs to the realities of the current situation," said James Donegan, chairman and CEO, in a released statement.