Online information source for semiconductor professionals
KLA-Tencor jobs cuts tell another story
Popular articles
Voltaix names Peter Smith as CEO - 09 November 2011
Sematech Litho Forum: Sematech mulling multi-beam mask writer effort - 12 May 2010
TSMC hosts 2008 Green Forum on ‘green’ factories - 31 October 2008
Oberai discusses Magma’s move into solar PV yield management space - 29 August 2008
TSMC honors suppliers at annual Supply Chain Management Forum - 03 December 2008
Innovation, node migrations and yield improvement strategies once meant that KLA-Tencor could ride out the worst of an economic or semiconductor specific downturn better than most equipment suppliers, which were more dependent on production expansions to make sales.
When KLA-Tencor announced a 15% reduction in its global workforce last year, I wasn’t surprised as the current spending cuts are significant with no supplier immune.
In fact, IMHO suppliers have reacted very fast to the changing business environment. Take a look at the graph below, which charts the number of employees at KLA-Tencor from 2000 onwards (SEC Filings for June of each year covered), and the first thing that interests me is how slow the company was in shedding jobs in 2001 and 2002 as we entered what everyone came to regard as the ‘worst downturn in the history of the semiconductor industry.’
It would seem lessons had been learnt from that difficult time and importantly remembered almost a decade later.
Business has boomed at KLA-Tencor as we went through copper, low-k dielectrics, HKMG and the like. Recruitment picked up in 2004 through to 2007 as the company went on an acquisition spree, which included ADE, OnWafer, SensArray and ThermaWave. In total, about 14 companies of various sizes had been acquired since 2000.
The problem I have with this chart is that it also tells another story and one that I hesitate to bring to a conclusion.
The latest announcement from KLA-Tencor on further job losses (approximately 10%) of the workforce puts the company into new territory. In 2003, KLA-Tencor had finally reached a bottom in workforce reductions, reaching approximately 4,900 employees, down from a peak in 2001 of 6,400.
Taking the 6,000-strong workforce in June, 2008 and deduct the first wave of job cuts with the latest round, gives a possible headcount for 2009 of approximately 4,590.
Immediately, this highlights that KLA-Tencor has downsized its workforce to the lowest level and at the fastest pace in a decade.
Tough times mean tough decisions but this chart could indicate that the times could be a lot tougher than many expected, not just for KLA-Tencor but for all equipment suppliers.
