Applied Materials to Cut 2,000 Jobs

Applied Materials Inc., the largest maker of equipment used in the production of microchips, said Thursday that it plans to cut about 2,000 jobs, or 10% of its staff, after other measures proved insufficient to combat a global slump in the semiconductor industry.

The company said about 700 positions will be cut at its operations in California, 500 positions will be eliminated in Austin, Texas, and the remainder will be trimmed from other facilities worldwide.

Applied will take an unspecified charge on earnings in its fiscal fourth quarter as a result of the cuts.

The move comes as chip sales worldwide are now forecast to fall even more drastically than earlier thought because of the terrorist attacks.

Market researcher IC Insights Inc. said this week that it expects chip sales to fall 34% because of the attacks. The previous worst year for the industry was in 1985, when sales declined 16.8% from the previous year.

Applied had instituted a voluntary severance package for 1,000 employees, and a company spokesman said Thursday that a majority of those buyout offers had been accepted. The spokesman said the attacks had no bearing on the decision to make the job cuts.

Chip makers across the world have cut tens of thousands of jobs amid the worst-ever downturn in the $130-billion industry.

Meanwhile, Semiconductor Equipment and Materials International, a trade group, said its book-to-bill ratio, which gauges demand for chip equipment tools made in the U.S., was little changed at 0.61 in August, Bloomberg News reported.

A ratio of 0.61 means that U.S. semiconductor equipment makers took $61 of orders for every $100 of shipments. A ratio below 1 indicates a contracting market. August’s ratio was little changed from the revised 0.63 ratio in July.

Average monthly orders, or bookings, fell 3% to $742.2 million in August from a revised $761.4 million in July. New orders were 75% below the $2.98 billion in August 2000.

Sales were little changed at $1.207 billion from a revised $1.21 billion in July. They were 50% below year-earlier shipments.

Shares of Santa Clara, Calif.-based Applied fell $1.63 to $29.49 on Nasdaq.