The latest reduction brings the total eliminations to 1,300 positions, or 18 per cent of its workers, the chipmaker said. -- NP FILE PHOTOCHIP-MAKER Chartered Semiconductor Manufacturing, which is forecasting its biggest loss ever of US$147 million this quarter, will retrench over 500 workers here to cut costs.
The job cuts will be across all levels, 'from manufacturing to managerial to executive', said Chartered's 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 months pay for every year of service; those with shorter length will 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 Mr Chia, stressing that it had this step as a last resort.
He pointed out that utilisation had fallen to 59 per cent for the quarter ended Dec 31 due to the financial crisis and expects this to fall further to 37 per cent.
'Unfortunately business conditions continue to deteriorate, and with utilisation below 40 per cent, despite the (Government's recently announced) jobs credit scheme, resizing is unavoidable,' he said.
Under the scheme, the Government will subsidise part of a worker's wage.
The retrenchment benefits will cost Chartered US$8 million, but will help it save US$16 million over the year.
The latest retrenchment exercise brings the total job cuts to 1,300, or 18 per cent of its previous work force. In December, Chartered retrenched about 270 contract staff; it had also 'exited poor performers' and frozen hiring, not replacing those who quit voluntarily, said Mr 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$92.6 million for its financial year ended Dec 31, on the back of revenues of US$1.66 billion. It booked a US$101.7 million 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 Mr Chia.
It is also working on other cost-cutting measures including reducing its capital expenditure by 35 per cent to US$375 million 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 Mr 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.
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