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National Semiconductor to lay off 1,725

Two plants down, three to go

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National Semiconductor announced Wednesday that it would immediately lay off 850 employees and follow those layoffs with an additional 875 over the next "several quarters" as the company closes two plants: one in Suzhou, China and a second in Arlington, Texas.

The layoffs, which will total 26 per cent of the analog and mixed-signal semiconductor manufacturer's workforce, were announced in the company's financial report for its third quarter of fiscal 2009, which ended March 1, 2009.

NatSemi's Q3 sales were $292m (£270m), which was down 31 per cent from the $422m (£391m) reported in the previous quarter and down 36 per cent from the $453m (£419m) in sales during the same quarter last year.

Net income sunk $21.1m (£19.5m) in the quarter, down from $72.9m (£67.5m) during the same period in 2008 - and that was after a one-time boost of $11m (£10.2m) in "discrete income tax benefits" during the just-ended quarter.

The company's execs don't predict a turnaround anytime soon, projecting that sales will decline another 5 to 10 per cent during the current quarter.

After the plant closings in China and the US, NatSemi will be down to three manufacturing facilities: wafer-fab plants in South Portland, Maine and Greenock, Scotland and an assembly and test facility in Melaka, Malaysia.

NatSemi's chairman and CEO Brian Halla offered the same explanation for the layoffs that has been emanating from corner offices around the globe: "The worldwide recession has impacted National’s business as demand has fallen considerably." ®

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