National's rationalizations plan includes closing its China plant next year
National 3.0 growth strategy? It’s National “classic” less 1,725 jobs, or 26 per cent of its work force!
Amid falling sales, the Santa Clara, Calif.-chipmaker said today it will now eliminate 850 positions worldwide in product lines, sales and marketing, manufacturing and support functions and 875 over the next few quarters; shutting an assembly plant in China and an old “wafer-fab” in Texas.
Of the first 850 employees laid off, approximately 525 of those will be at headquarters and other non-manufacturing sites, while the remaining 325 will be factories.
NatSemi targets a break even point close to $250 million
The “alignment” will bring the chipmaker’s break even revenue down to below $300 million per quarter in the near term and once the manufacturing consolidation is completed, closer to $250 million per quarter.
National Semiconductor also reported today a 36 per cent revenue drop – to $292.4 million – for its fiscal third-quarter and profits fell 85 per cent to $21.1 million, compare to a year earlier. Fab utilization was down to 37 per cent, from 66 per cent the prior quarter!
Looking ahead, National’s CEO, Brian Halla, guided to further revenue reductions in the current quarter - down 5 to 10 per cent sequentially - but indicated the market had stabilized somewhat.
Restructuring its $1.2 billion debt at a high cost
A growing concern is the company’s debt load of $1.2 billion. At the end of last quarter, National was able to expand its two debt covenants in return for a $125 million early payment due this quarter and a “modest” interest rate increase.
