September 21, 2001 — SAN JOSE, CA — Semiconductor equipment manufacturing giant Applied Materials said it plans to cut about 2,000, or 10 percent of its staff, as it struggles with a continued downturn in the industry.

The company will slash 700 jobs in Silicon Valley and 500 in Austin, Texas. The remaining 800 or so cuts will come from other Applied operations around the world, Officials say the layoffs will begin immediately.

“We implemented a series of aggressive cost-reduction programs in an effort to avoid reductions in our work force,” said James C. Morgan, chairman and CEO of Applied. “Unfortunately, the length and severity of the downturn and lack of near-term visibility have made it necessary for us to take additional action to align our operations with the current level of business.”

Applied had hoped to stave off any cuts by implementing executive and employee salary reductions, mandatory shutdowns, a voluntary separation program, restricted hirings, and cuts in its temporary work staff.

In the three-month period that ended July 29, Applied earned $28.5 million, or 3 cents per share, down from $603.8 million, or 70 cents per share, in the comparable period last year. Sales fell 51 percent, from $2.73 billion last year to $1.33 billion this year.