Tower Cuts 170 Jobs
MIGDAL HAEMEK, Israel, May 29, 2008 -- Chip maker Tower Semiconductor Ltd. has cut 170 jobs -- about 11 percent of its work force -- as part of plan to reduce costs by $40 million a year.
The positions were eliminated primarily in management and support and will save $14 million a year, the company said. Tower has about 1500 employees, according to its Web site.
The cuts come little more than a week after Israel-based Tower announced it will acquire foundry Jazz Technologies of Newport Beach, Calif., in a stock-for-stock transaction. Jazz makes semiconductor chips for applications including wireless, optical networking, power management, storage, and aerospace/defense and has about 730 employees.
The equity value of the deal, expected to close before the end of the year, is approximately $40 million, while the total value, including net debt, is about $169 million.
Tower said Jazz's mixed signal, power management (CMOS and BCD), and radio frequency (RF CMOS, silicon-germanium and BiCMOS) semiconductor devices complement its CMOS image sensors, nonvolatile memory and RF CMOS products. The combined company will have facilities in the US and Israel and an ownership interest in a fabrication facility in China. The combined company has a capacity of approximately 750,000 wafer starts a year (8-in. equivalents).
Tower said the cost reduction plan was needed due to the continued decline of the dollar, foundry wafer price pressures and the overall worldwide economy. The company also cited the fact that certain Israeli government grants it was promised are now two years overdue.
Other cost-cutting measures related to its Jazz acquisition include changing the company's organizational structure and making operations and purchasing functions more efficient, Tower said.
For more information, visit: www.towersemi.com