245 Atmel workers laid off as part of restructuring
California-based semiconductor manufacturer Atmel Corp. laid off 245 employees Monday at its Colorado Springs plant and will close for 11 days starting Dec. 24 as part of a companywide restructuring program.
The layoff is the largest since 2001 at the local plant, which employed about 1,700 before the cutback, and the largest at any local employer since Sanmina-SCI Corp. laid off 319 employees when it closed a Fountain electronics plant at the end of last year. Atmel said the layoffs affected 11 percent of the company's 6,800 employees worldwide and cost it $4 million in severance costs but will save $18 million a year subsequently.
Atmel also imposed a hiring freeze except for "critical" positions, put "strict controls" on discretionary spending, and expanded a previously announced 11-day manufacturing shutdown to include all other employees for 10 days. The company estimates its revenue for the year's final quarter will decline between 12 percent and 18 percent from $400 million during the previous quarter, and forecasts that profit margins will shrink.
Atmel Chief Executive Steven Laub in a prepared statement attributed the cutback to the "effects of the broader economic decline," mostly in its memory and automotive products. "To manage through this environment, we are taking necessary and prudent steps to ensure Atmel's competitiveness and our ability to serve our customers. Such decisions are difficult, and we are committed to helping smooth the transition for affected employees."
Job prospects for the laid-off employees "aren't good at this time, but we have several prospects we are working with that could potentially improve the job prospects in this industry," said Mike Kazmierski, president of the Colorado Springs Regional Economic Development Corp. "Hopefully, some of these companies or our other prospects may be able to take advantage of some of the skills of these employees."
The layoff comes as the Colorado Springs area job market is deteriorating - the area's unemployment surged in October to 6.6 percent, the highest in more than five years, and local payrolls started declining in September.
Local economists estimated job losses at Atmel will trigger another 300-400 cuts at suppliers, retailers and other local businesses, reducing local wages by more than $30 million, including Atmel's payroll, and local tax collections by as much as $3.5 million.
The plant is Atmel's largest and the area's only semiconductor manufacturing operation after Intel Corp. halted production a year ago.
The plant primarily makes microcontrollers used in touch screens, battery management systems and other devices, but also makes nonvolatile memory chips that retain information when power is cut, and application-specific semiconductors and other chips used in the automotive industry.
Two Arizona computer chip companies last month withdrew a $2.3 billion hostile offer for Atmel Corp. after Atmel's board turned down the $5-a-share bid as too low.
Microchip Technology Inc. and ON Semiconductor Corp. had planned to carve up Atmel's microcontroller, nonvolatile memory, radio frequency and automotive units while selling off its application-specific chip business to a third company they didn't identify.
Atmel shares fell 21 cents to $3.16 in trading Monday on the Nasdaq Stock Market.
-
Contact the writer: 636-0234 or wayneh@gazette.com
