Despite earlier cries of a labor shortage and the need to lift caps on hiring foreign workers, Cypress Semiconductor (CY) will lay off about 100 employees and take a charge in the first quarter as it seeks to get costs under control.
Cypress CEO Dr. T. J. Rodgers was among the high-tech executives--including representatives from Texas Instruments (TXN), Sun Microsystems (SUNW), and Microsoft--that expressed concern before Congress late last month about a shortage of eligible U.S. workers available for high-tech jobs. The group recommended eliminating a cap on hiring foreigners set by the federal government at 65,000.
Cypress since has said that its revenue is expected to drop between 4 percent and 9 percent during the first quarter, down from the previous quarter's revenue of $134 million. Cypress also will report a loss of between 6 cents and 8 cents a share during the first quarter, prior to restructuring and other charges of $85.5 million. Nevertheless, analysts expect Cypress to break even in the same quarter, according to First Call.
The restructuring efforts will cut about 100 manufacturing jobs in the company's Texas plant, and will result in a writedown of some wafer manufacturing equipment. Cypress also is looking to eliminate its SRAM production and significantly reduce manufacturing costs on high-margin, non-SRAM products.
The Cypress Texas plant now will focus on non-SRAM products with the lowest 0.6-micron wafer cost possible. The company's 0.25-micron technology, which currently is produced in its San Jose, California, and Minnesota plants, will be transferred to Texas.
The maker of high-performance integrated circuits is shutting down its six-inch, 0.6-micron wafer-fabrication plant in Bloomington, Minnesota, and moving all of that plant's production to another plant in Minnesota.
Cypress also is closing its test plant in Thailand and consolidating a majority of its test-manufacturing operations into an automated plant in the Philippines. That move will result in the replacement of about 570 subcontract workers in Thailand, with only about 250 new Cypress employees in the company's Manila plant.
Cypress shares closed down 3/16 today at 8-11/16.