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KLA-Tencor said Tuesday that it plans to reduce its global workforce by approximately 15% by June 30, 2009, joining Cymer, Applied Materials, and other semiconductor equipment companies taking similar action in response to the deepening global economic--and market specific--recession. The company positioned the layoffs as one of several cost-reduction measures it is enacting to lower the company’s quarterly operating expense run rate to approximately $165 milllion-$170 million by the end of FY2009 because of weak customer demand.

"Our employees are the heart of our organization, so it is with considerable reluctance that we are proceeding with this necessary reduction," said CEO Rick Wallace. "We will continue to monitor the demand environment and make the necessary adjustments to weather this downturn, help optimize our profitability, maintain our strategic focus, and strengthen our competitive position."

KLA-Tencor estimates that, in connection with the workforce reduction, it will incur an initial charge of $15 million-$20 million, nearly all of which can be attributed to the estimated severance costs associated with the lowered headcount. Most of that charge will result in future cash expenditures, which the company believes will be paid out in FY09.

The company also said that it anticipates incurring additional restructuring charges, severance costs, and other related expenses in connection with the layoffs, at least through the remainder of FY09 but currently cannot estimate the aggregate amount of such additional charges.

In the fiscal quarter ended Oct. 30, KLA-Tencor saw its revenues drop from $693 million to $533 million (down 23%) compared to the same quarter in FY2008, and its net income decrease sharply from $88 million to $19 million year over year (down 78%).