IDT to axe 900 staffers
Instigates major cost-cutting programme
IDT blamed the downturn in the global chip market for the 900 job cuts it announced yesterday.
The US-based company will rid itself of around 18 per cent of its 4900-strong worldwide workforce, primarily by laying off staff at its overseas manufacturing plants in the Philippines and Malaysia. It will also implement a hiring freeze, force some staff to take vacation time, halt all "non-essential" capital spending and instigate a number of other cost-cutting measures.
"The industry-wide inventory correction and slowdown in customer demand necessitate that IDT adjust its operating costs and production capability to levels currently required by the markets we serve," said Jerry Taylor, IDT's president and CEO.
The company also said its Q2 revenues will be almost half the figure it reported for its first quarter. Then, it recorded sales of $213 million - Q2 is expected to yield only $120 million, a quarter-on-quarter decline of 44 per cent. IDT hopes its cost-cutting programme will save it around $11 million a year, but first it will have to take a $2.5 million hit this quarter to pay for the layoffs.
IDT focuses on chips aimed at communications applications, probably the worst-hit sector of the semiconductor industry. IDT is probably best known for its former subsidiary, Centaur, sold in 1999 to VIA, which now sells IDT's WinChip x86-compatible CPUs under the C3 brand, despite calling it Cyrix after its acquisition of that chip maker last year. ®