Applied Materials to Cut 12% of Workforce

Chip manufacturing equipment maker Applied Materials(AMAT Quote) said Wednesday that its fiscal fourth-quarter earnings dropped 45% and the company announced plans to cut 1,800 jobs by the end of fiscal 2009.

The job cuts represent roughly 12% of the company's global workforce and will come through a combination of work force reductions, attrition and voluntary separations. Applied Materials expects the job cuts and other restructuring measures to save $400 million.

The reduction is the second announced this calendar year by Applied Materials, which has suffered along with the rest of the semiconductor industry. In January, the company said it was cutting 1,000 jobs, or 7% of its employees at the time.

"As Applied moves into fiscal 2009, we will implement further cost-reduction actions due to declining market conditions," said Chief Executive Mike Splinter.

For the three months ended Oct. 26, Applied Materials said it earned $231 million, or 17 cents a share, down from $421.8 million, or 30 cents a share, a year ago.

Analysts polled by Thomson Reuters were expecting a profit of 14 cents a share.

Sales fell 14% to $2 billion, led by declines in the company's silicon and applied global services divisions.

For its just-ended year, Applied Materials earned $960.7 million, or 70 cents a share. Sales were $8.13 billion, down from $9.73 billion.

Its shares fell 70 cents, or 6.6%, to $9.95 in regular trading Wednesday.