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Applied Materials to Lay Off 2,000

March 17, 2003

SAN JOSE, Calif. (AP) _ Applied Materials Inc. announced plans Monday to cut 2,000 jobs, or 14 percent of its work force, as part of a restructuring of the world’s largest maker of semiconductor equipment.

The Santa Clara-based company also said it would close several facilities around the world and embark on a cost-savings program.

About 1,400 positions will be eliminated in North America, and the majority of notifications will take place by the end of the second quarter, the company said. The remaining 600 jobs will be eliminated elsewhere around the world by the end of the fourth quarter.

It’s the latest round of job cuts for the company whose fortunes have risen and fallen with the chip industry, which is now just beginning to recover from its worst slump in history.

``The world is changing and the semiconductor industry is changing with it,″ said James C. Morgan, Applied Material’s chief executive. ``Our customers are investing in advanced, complex technologies at the same time they are under enormous pressure to reduce costs.″

Morgan said the restructuring will allow the company to generate increased profits at current sales levels while maintaining product development capabilities.

Applied expects to incur pretax restructuring charges of up to $425 million over the next four quarters, including $235 million for consolidation of facilities and related fixed assets, and up to $120 million for employee severance.

In November, the company cut 1,750 jobs, or 11 percent of its work force at that time.

Shares of Applied Materials rose 76 cents, to $13.13 in Monday trading on the Nasdaq Stock Market. In the extended session, they fell 25 cents.

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On the Net:

Applied Materials: http://www.amat.com

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