National Cuts 1725 Jobs

Chip maker National Semiconductor Corp. will cut 26 percent of its work force and close two plants after third-quarter earnings plummeted 71 percent from a year ago, the company announced last week.

For the third quarter of fiscal 2009, which ended March 1, National reported sales of $292 million, down 31 percent from the second quarter and down 36 percent from the same quarter one year ago. Profit slid from $72.9 million in the third quarter of 2008 to $21 million for the same quarter in 2009.

Bookings for the third quarter decreased by 25 percent from the second quarter, and was seen broadly across all major geographies, National said. The company said it expects the fourth quarter to decrease by 5 to 10 percent from the third quarter as its customers continue to be affected by the weak economy.

In response to economic conditions, National said it immediately will slash 850 positions worldwide in product lines, sales and marketing, manufacturing and support. It also will close its assembly and test plant in Suzhou, China, and its wafer fab in Arlington, Texas, over the next several quarters, eliminating another 875 jobs.

The work done at those plants will be transferred to other National locations. The company currently employs about 6500 people worldwide.

“The worldwide recession has impacted National’s business, as demand has fallen considerably,” said Brian L. Halla, chairman and CEO. “However, the actions we announced today will help us remain competitive as we continue to focus on growing markets that can benefit from our new energy-efficiency initiatives.”

After the consolidation, National will have three manufacturing facilities: wafer fabs in South Portland, Maine, and Greenock, Scotland, and an assembly and test facility in Melaka, Malaysia. The company’s chips are used in mobile phones, cars, audio systems and the energy market.

National said it will incur between $160 million and $180 million in severance pay, asset impairments and other costs related to the job cuts, with between $130 million and $145 million likely being recorded in the fourth quarter of 2009.

For more information, visit: www.national.com