Microsemi Cuts Employees’ Pay by an Average 10%

Hurt by a cash crunch, Microsemi Corp. last week cut the salaries of its employees and managers by an average of 10% for at least six months, according to a recent memo distributed by the custom chip manufacturer’s top executive.

The memo, signed by President Philip Frey Jr., said the company needed to reduce the pay of all employees as part of its plan to return to profitability. The company announced earlier that it would reduce the size of its work force and salaries but gave no details.

The pay cuts are effective for the next six months, Frey said in the memo. Staff reductions will be made primarily in business units that are losing money. Cuts in top management salaries of 15% will result in a net domestic payroll savings of about 10%, the memo said.

David R. Sonksen, vice president of finance, would not comment on details in the memo. He did confirm that the company will reduce the salaries of its employees, with management taking proportionately larger cuts than workers.