Applied Materials Inc will cut 1,750 jobs, or 11 percent of its staff, as the world's biggest maker of semiconductor-making equipment endures the industry's worst sales slump. The shares fell.
The cuts will reduce earnings in the first quarter ending Jan. 26, spokesman Jeff Lettes said, declining to say by how much.
The company will pare about 800 jobs from its California operations and 200 more in Austin, Texas. The rest will come from other US and worldwide locations.
Applied's third quarter marked the sixth straight period that sales fell from year-earlier levels. The company in August said fourth-quarter orders may fall 15 percent as customers such as Intel Corp cut planned spending on factories and equipment.
Shares fell as much as 3.3 percent on the news as investors said the cuts may signal a recovery isn't as near as they had hoped.
"The market is reading between the lines that Applied is thinking there is a slowing beyond that 15 percent reduction," said Graham Tanaka, of Tanaka Capital Management, who manages US$100 million. He sold Applied shares a few months ago and is interested in buying them again.
The shares of Santa Clara-based Applied fell as low as US$15.91 after the announcement.
Applied will start notifying employees of the job cuts tomorrow.
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