Layoffs hit IBM, Motorola and Tundra

By Colleen Taylor, Contributing Editor -- Electronic News, 5/31/2007

Layoff news abounded this week across the semiconductor industry, as companies pursued restructuring efforts to cut costs and increase shareholder value.

Mobile communications player Motorola Inc. announced Tuesday that it is on track with its previously announced 3,500 job cuts, which will be completed on schedule by June 30 and are expected to give the company some $400 million in annualized cost savings. Motorola, which had a scare earlier this spring when famed Wall Street raider Carl Icahn attempted in vain to snag a spot on the company's board, is not finished cutting the fat yet. The company said this week that it will cut another 4,000 jobs in an effort to achieve another $600 million in annualized cost savings in 2008.

"Long-term, sustainable profitability is -- and always has been -- Motorola's top priority," Tom Meredith, Motorola's CFO, said in a statement. "We are confident that the steps we are announcing today, together with the actions that we have outlined previously, will further improve the company's financial and operational performance and create value for our stockholders."

Meanwhile, technology giant IBM Corp. laid off 1,570 people Wednesday, mostly in its technology services unit. Coupled with the other services-related job cuts it completed in early May, the Armonk, New York-based company said that it has slashed a total of 3,023 jobs this quarter. Its reduction strategy has not been without opposition: Alliance at IBM, an AFL/CIO-related worker's union, has been publicly combating what it sees as threats to the company's United States-based jobs. According to the group's Web site, its aim is to "challenge IBM on the many issues facing employees from off-shoring and job security to working conditions and company policy."

The group's off-shoring fears do not seem to be unwarranted. Last year, IBM announced plans to triple its investment in India to $6 billion over the next three years, the largest sum ever committed to the country by a U.S. company. At the time, IBM said it planned to make India "a cornerstone" in the computer service superpower's global network.

Meanwhile, Ottawa, Ontario-based system interconnect company Tundra Semiconductor Corp. announced Wednesday plans to cut a total of 20 positions and to leave several vacant positions unfilled, slashing about 7 percent of the company's total workforce. Research and development and general and administrative organizations were primarily impacted by the initiative, which Tundra said should lead to savings of $2 million in fiscal year 2008.

Motorola, IBM and Tundra are not the only companies that have done some "spring cleaning" of their workforces. Analog interface components supplier Avago Technologies announced earlier in May a 230  employee layoff among its Singapore workforce, a significant cut of its 1,000-person engineering employees. Also in May, Nokia Siemens Networks announced a whopping 9,000 job cuts, and Transmeta Corp. went through with plans to cut 15 percent to 20 percent of its already-small 65 person workforce.