Hughes Aircraft Plans to Lay Off 295 at Newport Beach Computer Chip Plant

Citing falling orders for an outdated technology, Hughes Aircraft Co. said it will lay off 295 employees at its computer chip plant here by the end of the year.

Hughes’ microelectronics division currently employs 750 in Newport Beach. The division employs another 150 in Torrance, and five workers will be laid off there, company executives said.

Managers will notify employees Friday whether they will keep their jobs, said Kearney Bothwell, a company spokesman.

Hughes executives cited declining demand for the computer chip mounting systems manufactured in Newport Beach, which are mainly used in satellite and missile guidance systems made by other Hughes divisions in El Segundo and Tucson, Ariz.

“We regret having to make these staff reductions,” said Mark Haugen, a company manager, in a statement released Wednesday. “I wish there were another way, but there isn’t.”

The mounting design made at the Newport Beach plant allows different types of chips to be built into the same part of a computer, enabling them to exchange information more quickly than if they were mounted separately.

The design dates from the late 1970s, however, and demand had tapered off. Other workers in Newport Beach make a more advanced assembly, which uses thinner mounting materials to allow even smaller chip assemblies. But those operations could not absorb all of the workers used for the original design, managers said.

Hughes also is laying off about 1,000 workers at its plant in Fullerton. Another 3,700 jobs are being moved to El Segundo, Tucson, and other company locations. The work force in Fullerton will be reduced to about 1,400 by the end of the year.