Intel, Philips to furlough employees

May 24, 2001 – Albuquerque, NM – Intel Corp., Santa Clara, CA, is seeking volunteers to take two weeks of unpaid leave while Philips Semiconductors, Eindhoven, Netherlands, plans to furlough about 180 employees for three months without pay, the companies have announced.

The cost-cutting measures are in response to a worldwide slowdown in the semiconductor industry.

Intel is trying to reduce costs at its Fab 11 plant in Rio Rancho.

Intel Spokesman Terry McDermott said the company is asking employees at the fab – one of the three manufacturing lines at the Rio Rancho plant – if they would voluntarily take two weeks of unpaid leave this summer to help cut costs.

Intel announced initiatives in February to trim hundreds of millions of dollars from the chipmaker’s books this year. Among them were delayed pay raises and cuts in travel and overtime expenses.

The company also announced that it is trying to trim its worldwide work force by 5,000 this year.

Philips Semiconductors said it will send home about 15% of its total work force beginning June 1 as part of a 90-day leave-of-absence program to spare costs. The company employs about 1,185 workers.

Philips makes chips for cellular telephones and other communications devices at its Albuquerque plant.

Paul Morrison, a spokesman at Philips’ offices in San Jose, CA, said the mobile communications sector of the semiconductor industry has turned soft because of increased inventories by manufacturers and because of market saturation.

“This is a big problem and everyone [in the semiconductor industry] is grappling with it,” Morrison said. “The overall market conditions are poor.”

Philips’ leave program will prove to be more severe to workers there than Intel’s program, however.

“For many, it’s a chance to have the summer off,” Morrison said, “but for many, it’s time off without pay.”

Morrison said it’s likely some workers will reconsider their jobs at Philips during that time and might not elect to return when the leave program ends in September.

The program is meant to help partially idle the Albuquerque plant to save money and keep inventory levels in step with industry demands, Morrison said.


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