After Q4 loss, Chartered to cut 600 jobs

Written by Agencies | Singapore | Updated: Jan 30 2009, 22:41pm hrs
Chartered Semiconductor, one of the world's biggest custom microchip makers, said it would cut hundreds of jobs worldwide as it announced a fourth-quarter net loss of USD 114 million.

The company, which is listed in Singapore as well as on the Nasdaq in New York, pointed to slowing demand in the face of the global economic crisis, which has left key customers with vast inventories on hand.

It said it would cut 600 jobs "in the coming days," bringing the total workforce reduction since the third quarter to about 1,300 positions, or approximately 18 per cent of the total.

The job cuts were "a painful but prudent business decision" that would provide USD 16 million in annual savings, chief executive Chia Song Hwee said.

Chief financial officer George Thomas cited the "unprecedented rate of decline in semiconductor demand worldwide" in announcing the figures, the latest in a slew of grim corporate news underlining the depth of the crisis.

"The negative macroeconomic environment and difficult end-market conditions are continuing to impact the foundry industry and our business in a significant way," Thomas said.

"Foundry customers, we believe, are cutting orders even more aggressively as they grapple with worsening visibility in the marketplace and rising inventories."

In the current environment, it is difficult to accurately predict how the first quarter of 2009 will turn out, but the company is currently projecting a 32 per cent fall in revenues compared with the fourth quarter, Thomas said.

The net loss of USD 114 million for the three months ended December 31 compared with a net profit of 5.9 million for the same period a year earlier.