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ON Semiconductor Another Casualty Of Recession

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On August 17th, 2012, ON Semiconductor Corporation committed to a cost reduction program which includes wiping out 250 of its workforce.

The majority of the staff will leave by the end of the third quarter of 2012. The company currently employs around 20,000 people.

As a result of the plan, the firm expects to incur severance and related costs ranging from $11 million to $14 million for the quarter ended September 28th, 2012 with these amounts being subject to change.

The revenues of the manufacturer of RF silicon chips used in the consumer, industrial and automotive sectors have crashed since the third quarter last year, although they remained practically flat between Q1 and Q2 2012.

The global economic recession as well as natural disasters, such as the Thailand floods, were also a factor in the downturn and have affected many  chipmakers, who have experienced reduced orders.

Last October, ON Semiconductor announced the closure of its wafer manufacturing facility in Aizu, Japan. The company said this was  part of its ongoing strategy to streamline operations, migrate production to large, high-volume fabs, and invest in more advanced wafer technologies.

The firm also announced  earlier this month that its Executive Vice President and Chief Financial Officer, Donald Colvin, had resigned.

Another of the casualties, which has been hit even harder is Japanese firm Renesas. The company has been forced to consider financing from an investment firm and has also had to cut its workforce by a humungous 30 percent (or 14,000 jobs).

It'll be interesting to see how much more ON Semiconductor and the other chip makers need to cut back to pull through.

 


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