SAN FRANCISCO—ON Semiconductor Corp. plans to cut additional jobs as part of a plan to save the company between $10 million and $15 million per year, company executives said Thursday (Aug. 2).
In a conference call with analysts Thursday, Donald Colvin, ON Semi's chief financial officer, said the company planned to cut 10 percent of non-manufacturing jobs in "high cost regions." Colvin—who the company announced Thursday plans to resign—said the company carried out a 10 percent reduction in headcount at its Sanyo Semiconductor division during the second quarter. ON Semi acquired Sanyo in Jan. 2011.
The announcement came in the wake of ON Semi's second quarter financial report. The company announced second quarter revenue and a third quarter sales target that came up short of consensus analysts' expectations.
ON Semi announced last year plans to close three fabs in Japan and two back-end test and assembly facilities in Thailand. The fab closures are taking place this year, while the back-end facilities never reopened after being damaged during the Thai floods in 2011.
Keith Jackson, ON Semi's CEO, said the 10 percent cut in the Sanyo division, combined with the new job cuts and various other measures put in place should help better position the company for prevailing weak economic conditions. "We do believe that these are the right type of actions to be taking in the likely economy over the next year," Jackson said.
Like other semiconductor executives in recent earnings calls, Jackson said ON Semi has been hurt by sluggish sales as customer OEMs and distributors continue to maintain very lean levels of inventory. At the same time, Jackson said ON Semi is seeing an unusual amount of rush orders.
"We've seen a lot of folks that have continued to push on being lean, and then they get in the jam and have to order stuff quickly," Jackson said.
The sales figures are bad for most folk, and the banking news/ethics are not improving either. To blame any president, or for analysts to expect better returns during the present downturn, is the madness we live in. People are not spending as clownsumers like they did in the past, so it stands to reason that consumer products and high price ticket items like cars will take a dive as people scramble for cover. I'll keep the car for another year, same for the phones and PCs etc. However, I will stockpile a little red wine as long as the price does not spike. At least that keeps its value and brings pleasure! I do feel for those loosing their livelihoods, as it does not look like they will ever return. The youngsters might think twice about getting into this cyclical industry with such massive retrenchments with little shelter in bad times.
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