Responding to further weakening in semiconductor-equipment orders, Lam Research announced Wednsday that it will restructure itself and cut its global workforce by 20 percent to 25 percent. Lam employs about 4,500 people worldwide.
The wafer-fab-equipment supplier said it will take restructuring charges of $55 million to $65 million during the current quarter, ending June 30, with no anticipated tax benefit.
"Industry investment has further decreased across all regions," said James W. Bagley, CEO of Fremont, Calif.-based Lam. "We anticipate current business conditions to continue into calendar 1999, with capital spending in calendar 1998 down as much as 30 percent over 1997 levels."
In February, Lam launched a major restructuring program aimed at curbing costs and narrowing its focus on core etch and chemical mechanical planarization product segments, while de-emphasizing thermal chemical vapor deposition. That move reduced Lam's workforce by 14 percent, or about 700 employees.
In the latest cutback, Lam LRCX said restructuring charges will include costs related to severance compensation and facilities consolidation, as well as write-off of assets utilized in affected operations. However, the company's management said Lam still anticipates meeting analysts' fourth quarter expectations on operating results, excluding the restructuring charge.
Based on the weak outlook for wafer-fab investments, Bagley said Lam decided to "realign the company's cost structure while preserving key research and development investments to provide for new products."
He added, "We will continue to implement new business processes and global customer support strategies as part of our ongoing efforts at improving operating efficiencies. This focus will ensure the company is well-positioned when the market recovers."