The job cuts will be across all levels, “from manufacturing to managerial to executive,” said its chief executive officer Chia Song Hwee on Friday.
The mainboard-listed company, which makes chips for companies like Qualcomm and Broadcom, has six manufacturing plants here.
Laid-off Singaporean employees who have been with the company for three years or more will receive one month’s pay for every year of service; those with shorter terms would get half-a-month’s pay for each year of service.
The company will also be giving out an ex-gratia payment to these employees, and has engaged consultants to help them with outplacement, said Chia, stressing that it had this step as a last resort.
He pointed out that utilisation had fallen to 59% for the quarter ended Dec 31 due to the financial crisis and expects this to fall further to 37%.
“Unfortunately business conditions continue to deteriorate, and with utilisation below 40%, despite the (government’s recently announced) jobs credit scheme, resizing is unavoidable,” he said.
Under the scheme, the Singapore government would subsidise part of a worker’s wage.
The retrenchment benefits will cost Chartered US$8mil, but will help it save US$16mil over the year.
The latest retrenchment exercise brings the total job cuts to 1,300, or 18% of its previous workforce. In December, Chartered retrenched about 270 contract staff; it had also “exited poor performers” and frozen hiring, not replacing those who quit voluntarily, said Chia.
Chartered, the world’s third-largest maker of customised chips, announced the dismal outlook and job cuts on Friday morning before the market opened, together with its financial results for its fourth quarter and financial year.
It posted a net loss of US$92.6mil for its financial year ended Dec 31, on the back of revenues of US$1.66bil. It booked a US$101.7mil profit in 2007.
The financial turmoil had resulted in an “unprecedented rate of decline in semiconductor demand worldwide,” said chief financial officer George Thomas in a statement.
For now, the company is “very much focused on near term priorities to make sure we weather the downturn,” said Chia.
It is also working on other cost-cutting measures including reducing its capital expenditure by 35% to US$375mil this year, its lowest level since 2003, to “conserve liquidity.”
Even though cost is a concern, the company has decided to maintain its research and developing spending.
Chartered, said Chia, has to make sure “our position is not weakened ... if customers lose confidence (in Chartered), opportunities will not come” back when the economy recovers.
He did not rule out the possibility of further job cuts if the situation worsens. --
Source : TheStar
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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