Hi Mark ... when you merge two firms, there must be overlap so layoffs are inevitable ... but they need to be fair not to be all hugely demoralising. Management should maybe take a leaf out of the old HP culture that decreed any redundancy list should start with the department manager's name at the top!
That said, the real problem is usually marketing ... too few sales per product usually the result of a geographical imbalance between their profile and the market. The usual answer is to pare back products; the better one is to grow out of the problem. What's really needed is a feisty 'make lunch or be lunch' S&M VP and board support (patience) to allow it to happen.
As for fablite, just as ‘unlimited, abundant cheap debt’ fuelled the financial crisis, ‘ seemingly unlimited, abundant cheap foundry wafers’ will fuel an inevitable chip market crisis; and for exactly the same reasons … if something appears to be too good to be true, it is.
What if foundry wafer prices went up? What if availability was not so abundant? What if foundries started to ask their customers for up-front payments to secure future capacity? What if customers had to buy non-cancellable capacity in order to guarantee wafer availability, even in a down turn? What if I can’t get the extra capacity I need in the boom times, after all I’ll just be one on many, so will everyone else? What if I’m not considered to be a Tier 1 foundry customer? How long before the foundry investors want a greater share of the action, especially at the leading edge where foundry demand is highest and supply options limited?
Most fablite firms I talk to pooh-pooh the concept of any of these ‘what ifs’ happening. Seems to me capitalism isn’t that benevolent or accommodating. What if they did?
Chairman & CEO, Future Horizons
Totally agree with you above comments...firing staff is not the solution. It has been trend for the companies to go fabless to increase the profitablity. Some of the bigges like TI went fabless (not in analog processes). Just wonder if its gud thing for the semiconductor industry because finally FAB's will owned by selected few. Any thoughts on this ?
@ goafrit/phoenixdave: I totally agree with your sentiment and it is really terrible, when companies let go of people. At times like those, the corporate culture seems selfish!!
On a more general note, while, I agree with the philosophy of retaining experienced people, we can not debate the fact that sometimes companies let people go because they have no choice. For instance, the situation when semicon companies were facing reduced demand, and it was prudent to shut down fabs and reduce operations in assembly and test lines. Big companies which employ tens of thousands of people usually also employ a lot of floor people, with very specific skill set, who are difficult to accomodate elsewhere. Secondly, companies tend to be more severe on the operations side when cutting work force. Hence, the IT folks, security, facilities and other enablers come under the scanner if a company wants to shed some weight. Engineers and customer facing arms are valued, as they really define the company. Most of the people are engaged again once things start looking up as their competency was never doubted.
I hate when people think that firing staff shows a winning strategy. It is nothing but short-term effect on the greedy investors. There are companies in this world that refuse to follow that part and they remain stable. Instead of having strategies to make products that customers want, firms delight in firing staff thinking that works. What this firm has done makes no impact. It is like old Apple firing all the staff because they could not compete. But when Steve Jobs came, they realized that firing staff was not the issue, it was lacking vision and execution strategy. I hope someone just understand this in business.
Yup. In addition to that, reduce the aging but costly workforce in Japan and start design centres in China/India or work with outsourcing companies like Wipro. Also recommend to trasform some of their existing MCU line to ARM based application processors for cell phones & tablets.