Lam Research Announces Cutbacks, Corporate Restructuring

Lam Research Corporation (Fremont, CA) announced today that it will reduce its global workforce by approximately 20 to 25%. The company cited further weakening in the order outlook for semiconductor capital equipment as the reason for the action.

The company expects a restructuring charge in the range of $55 million to $65 million for the quarter ending June 30, 1998, with no anticipated tax benefit. The restructuring charge includes costs related to severance compensation and facilities consolidation, as well as write-off assets used in affected operations.

"Industry investment has further decreased across all regions," said James W. Bagley, Lam's CEO. "We anticipate current business conditions to continue into calendar 1999, with capital spending in calendar 1998 as much as 30% over 1997 levels.

"Based on this view of the industry, we have made the decision to realign the company's cost structure while preserving key research and development investments to provide for new products," Bagley said.

Edited by Beth Brindle