US chip outfits Conexant Systems and PMC-Sierra have both announced job cuts amid gloomy financial forecasts.

PMC said it would slash 230 jobs, or 13 per cent of its workforce, blaming sluggish chip demand and cancelled orders for communications chips. The job cuts will result in a first-quarter charge of at least $18 million.

The California-based outfit expects profit for the quarter to drop to two to three cents per share before charges - analysts had previously expected 25 cents. It cut its sales forecast to between $118 million and $120 million - compared to the expected $162.3 million.

Fellow California chip merchant Conexant said it would chop around 20 per cent of its workforce, made up of 1,500 full-time and 125 contract jobs, due to falling demand for its communications chips.

It expects sales to be 35 to 40 per cent below Q1's $410.4 million, and forecast a loss of between 35 cents and 40 cents, excluding charges. Analysts had forecast a loss of 24 cents.

The company is also considering selling its digital imaging business. ®

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