Fairchild Semiconductor Monday became the latest chip maker to succumb to the industry's sharp downturn with the company announcing a 10 percent reduction in payroll expenditures.
The cutback will include a reduction in contract workers, voluntary departures of employees, and lay offs of about 200 workers, said a company spokeswoman.
"The continuing slowdown across our industry, caused by the Asian economic crises, a slowdown
in PC sales, an overcapacity in global manufacturing capabilities, and excess inventory held by end-product manufacturers, has made it necessary to reduce the size of our organization at this time," said
Kirk Pond, president and CEO of Fairchild, based in South Portland, Maine. "The industry is expected to have a negative growth rate
this year, according to the Semiconductor Industry Association, although their long-term projections
for the industry remain strong."
Many industry managers and analysts now believe the 1998 slump could become the industry's worst downturn in history -- surpassing even the 1985 recession, which essentially restructured the industry in last decade.
"Fairchild will continue its focus on the research and development of new products, and the
continued development of new customer-service programs in order to meet our customers' needs and
position Fairchild for the industry rebound," Pond said. "As the only semiconductor company focused
solely on the development and manufacture of high performance, building block components sold into
a variety of end markets, our business was somewhat buffered from the downturn initially."
"This strategy has served us well during these difficult times. However, worldwide conditions are such that Fairchild must now join the long list of others in our industry who have been required to trim their work force," added Pond.