Jan. 15, 2008 – Applied Materials says it is reducing its global workforce by about 7% (1000 workers) through a combination of job elimination and attrition, primarily affecting its semiconductor equipment and services/support businesses. The moves, initially resulting in a $20M charge (mostly taken in fiscal 1Q08), are expected to save about $150M annually going forward, after being completed in the fourth quarter of FY08.

The company didn’t give much in the way of explanation, saying in a statement that it had already reorganized its semiconductor equipment business into the new “silicon systems group,” and remains “focused on improving operational efficiencies and the cost structure of our businesses, as well as enhancing our ability to pursue growth opportunities.”

The news wasn’t a surprise to at least one analyst. FBR Research’s Mehdi Hosseini said in a Dec. 21 research note that AMAT would likely trim headcount in the Jan/Feb timeframe (though he expected a ~10% reduction), spurred by declines in the silicon group’s business, attributed to weak orders from memory makers and foundries — down 20%-25% Q-Q in the Jan. quarter (fiscal 1Q08), and down another 5%-10% in April (2Q08). He speculated that some of the employees would be moved to the company’s solar business, which has more promising near-term growth, though it also has seen some delays of several quarters for revenues of thin-film systems (attributed to parts delays from third-party vendors, e.g. transparent conductor oxide and in-line metrology). Hosseini did point to projections of a big spike in AMAT’s display business in the Jan. quarter.