Applied Materials to Trim More Jobs

Chip equipment maker Applied Materials Inc. said Wednesday that it will cut an additional 1,700 jobs, or 10% of its work force, in response to the continuing semiconductor industry slump.

The global cuts are the latest move by Applied to save money as demand for its equipment has weakened.

In September, the company cut 2,000 jobs from its payroll.

“Unfortunately, the continuing downturn requires us to make some tough decisions to align our operations with current levels of demand for semiconductor equipment,” said James Morgan, Applied’s chief executive.

Applied and other chip equipment makers have become increasingly pessimistic about the timeline for a recovery.

They’ve idled plants and fired workers as demand disappeared, especially after the terrorist attacks.

“Bookings for the industry have continued to decline,” said Theodore O’Neill, a C.E. Unterberg Towbin analyst who rates the stock a “buy.” “It’s probably going down further before it goes back up again.”

Overall new orders for chip-manufacturing tools slipped to $598 million in October and will continue to fall until reaching September 1998’s low of $332 million, O’Neill said.

Applied said employees will be notified, starting today. About 450 positions in Silicon Valley and 600 jobs in the Austin, Texas, area will be affected.

The company previously reduced salaries, restricted hiring and ordered mandatory days off.

Santa Clara, Calif.-based Applied will post a restructuring charge for its fiscal first quarter, which ends Jan. 27.

Last month, the company posted a fiscal fourth-quarter loss of $82 million, or 10 cents a share, compared with a profit of $664 million, or 77 cents a share, for the same period a year ago.

Fiscal fourth-quarter sales were $1.3 billion, down 57% from $2.9 billion for its 2000 fourth quarter.

Applied shares closed up 93 cents at $44.87 in trading on Nasdaq. After hours, they fell 35 cents.

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Associated Press and Bloomberg News were used in compiling this report.