Applied Materials to Cut Workforce by 1,300-1,500

Nov. 11, 2009
Net income drops 40% in Q4

Applied Materials reported a return to profitability in the fourth quarter of fiscal 2009 following a net loss of $55 million in the previous quarter.

That said, net income of $138 million in the companys fourth quarter was down 40% over the same period one year ago, and net sales of $1.53 billion were down 25% from fiscal 2008s fourth quarter.

Applied Materials provides equipment and services for multiple industries, including semiconductor chips, solar photovoltaic cells and flat panel displays.

In reporting its fourth-quarter and fiscal-year results, the company also announced that it would reduce its global workforce by 1,300 to 1,500 employees, or 10% to 12%, over a period of 18 months. The restructuring plan and other cost-reduction initiatives are expected to achieve total annualized cost savings of about $450 million when completed.

The pre-tax cost of the restructuring plan is expected to be between $100 million and $125 million, according to Applied Materials, most of which will be recognized in the first quarter of fiscal 2010.

The company stated that it expects net sales to grow by more than 30% in fiscal 2010. Fiscal 2009 concluded with a net loss of $305 million on net sales of $5.01 billion. This compares with net income of $961 million and net sales of $8.13 billion in fiscal 2008.

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