"Teradyne will shed 532 jobs and cut workers' pay; Industry pinched by slow gadget demand" by Hiawatha Bray, Globe Staff | January 30, 2009
Teradyne Inc. of North Reading is cutting 532 of its 3,800 employees worldwide, and imposing a 10 percent pay cut on the rest. Teradyne employs 1,055 people in Massachusetts, but the company did not say how many local workers will be cut.
Teradyne, the world's leading maker of equipment for testing microchips, doesn't sell its complex, costly products in stores. Instead, they're purchased by major electronics firms around the globe. But the decline in consumer electronics sales that has forced retailers such as Circuit City and Tweeter out of business has also led to production cuts at chip makers like Intel Corp. and Advanced Micro Devices Inc. That means a lot fewer orders for the kind of chip manufacturing gear sold by Teradyne....
The layoffs at Teradyne follow a fourth-quarter loss and slower sales. For the three months ended Dec. 31, Teradyne lost $55.3 million.... Another local manufacturer of chip making gear revealed dismal results yesterday. Varian Semiconductor Equipment Associates Inc. of Gloucester reported that revenue for its fiscal first quarter ended Jan. 2 was down 58 percent from a year ago. The company went from a $43.7 million first-quarter profit last year to a $13.6 million loss this year.
"It's the collapse in consumer demand," said Teradyne spokesman Andy Blanchard. "The consumer, who drives about 60 to 70 percent of semiconductor demand, stopped buying in the third quarter."
Chip makers have responded with large layoffs. Intel, the world's leading semiconductor company, is laying off up to 6,000 workers. Rival Advanced Micro Devices will cut 1,100 jobs, and Texas Instruments Inc. plans 1,800 layoffs. At the same time, chip makers are reducing output and canceling plans for new production lines. That means fewer orders for Teradyne and other companies that produce chip making gear.
Len Jelinek, director and chief analyst for semiconductor manufacturing at research firm iSuppli Corp., said semiconductor equipment makers such as Teradyne won't recover any time soon. "All these guys are going to suffer significantly in 2009," Jelinek said. "We might see additional factory closures or furloughs or even layoffs."
In a recent report, iSuppli predicted that semiconductor equipment purchases for 2008 would amount to $42.7 billion, down 21.1 percent from $54 billion in 2007. Jelinek warned that sales this year could decline another 40 percent from last year's figure. Sales may pick up in 2010, because existing equipment will become obsolete and must be replaced, but Jelinek predicted that any improvement will be slight.
John Greenagel, spokesman for the Semiconductor Industry Association in San Jose, Calif., said the only hope for a turnaround lies in a renewal of consumer demand for computers, TVs, digital cameras, and other chip-based products. "Consumers have become the main driver of semiconductor consumption," Greenagel said. "Restoration in consumer confidence is critical to the turnaround in demand."
--more--"And it is not just Teradyne, folks. This is nation-wide!
"Jobless rolls hit 25-year high; US home sales, durables orders fall in December" by Associated Press | January 30, 2009
WASHINGTON - Week by week, the numbers that measure the economy get worse, heading toward uncharted territory.
The Labor Department released figures yesterday showing that the percentage of the workforce receiving unemployment benefits reached a 25-year high in mid-January.
The raw numbers were the highest since the government started keeping records in 1967, although the workforce was much smaller then. Adding to the grim picture were separate government reports that showed December home sales plunged to their lowest rate since recording began in 1963 and that orders for big-ticket manufactured goods dropped more than expected, capping the worst year for manufacturers since 2001.
But the jobless numbers were the worst - with more layoffs on the way. The Labor Department reported yesterday that a seasonally adjusted 4.78 million Americans claimed unemployment insurance for the week ended Jan. 17. That's an increase of 159,000 from the previous week and worse than economists' expectations.
As a percentage of workers covered by unemployment insurance, the tally is the highest since August 1983. The figures underscored how hard it is for laid-off workers to leave the unemployment rolls by finding a new job amid the deepening recession.
And the 4.78 million figure is deceptively low. It doesn't include about 1.7 million people receiving benefits under an extended unemployment compensation program authorized by Congress last summer, meaning the total number of recipients is actually closer to 6.5 million. That pushes the share of the workforce receiving benefits to the highest level since December 1982, when the economy was recovering from a steep recession.
Jobless benefits typically last 26 weeks, but Congress usually authorizes extensions during downturns. More job cuts were disclosed yesterday. Cessna Aircraft Co., part of the Providence conglomerate Textron Inc., said it plans to lay off 2,000 workers, on top of 2,600 cuts it revealed earlier this month. Ford Motor Co. said its credit arm would cut 20 percent of its workforce, or 1,200 jobs....
Good thing Ford didn't take that bailout loot.
US data due out today are expected to show the economy contracted at a rate of 5.4 percent in the final three months of last year, according to the consensus estimate of economists surveyed by Thomson Reuters....
WOW!!! CONTRACTED at a rate of 5.4%!!!!
--more--"And you haven't seen anything yet, America!
See: Jobless Sheep
