June 23, 2018
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Fairchild Semi cuts 1,100 jobs, lowers sales view

The Associated Press

SAN JOSE, Calif. — Fairchild Semiconductor plans to cut 1,100 jobs, or about 12 percent of its work force, and has reduced its revenue guidance for its fiscal fourth quarter.

The company, based in South Portland, Maine, now expects $320 million in sales for the quarter, down from previous guidance of $338 million to $360 million. The new guidance represents a 26 percent decline from the company’s revenue in the same quarter a year ago.

Wall Street analysts expect $351.7 million in sales, according a Thomson Reuters poll.

The guidance cut follows a similar reduction in November. Previously, Fairchild had forecast $377 million to $403 million in revenue.

The company also cut its projected gross margins to between 25.5 percent and 27 percent, down from a prior forecast of 27.9 percent to 28.9 percent.

Fairchild said that the layoffs should save $33 million annually. The company expects to record $12 million to $16 million in one-time severance costs.

Semiconductor companies across the sector have slashed their revenue projections for the quarter as demand for the products their chips go into, such as computers and cell phones, plummets.

Fairchild employs about 950 people in South Portland, where it has a manufacturing plant.

The company said the effect on the work force in Maine will remain uncertain, depending on how many take advantage of its voluntary severance packages, a spokeswoman said.

Fairchild plans to shut down operations for two weeks over the holidays. It closed during Thanksgiving week to cut costs.

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