(Adds CEO comments, union reaction, details)
AMSTERDAM, Sept 12 NXP [NXP.UL] said it plans
major cuts in manufacturing, its back office and research and
development, affecting 4,500 employees -- 15 percent of its
workforce -- and the restructuring will cost $800 million.
NXP said on Friday it needed to adapt to slowing economies,
a weak U.S. dollar and the smaller size of the company after
selling its wireless business.
The reorganisation will result in annual savings of $550
million by the end of 2010, NXP said, adding it expected to
close three factories and put a French factory up for sale.
"We expect to be in positive cashflow operations already by
the second half of 2009 thanks to these measures," CEO Frans van
Houten told Reuters in an interview.
Dutch trade union FNV Bondgenoten said it was shocked by the
large job losses. "We knew that the reorganisation would be on a
significant scale, but 4,500 is huge," the union said.
Van Houten said the company was comfortable with its debt
level even though the company has become smaller due to the sale
of its wireless chip activities.
"The equity ratio in excess of 35 percent is quite solid --
in fact many public companies would be happy to have that. We
are comfortable, also in view of the cash-generation capability
that we will have, to support this kind of debt," he said.
NXP said it will focus on businesses where it has innovative
products and market leadership positions such as automotive and
After the restructuring NXP will invest 16 to 17 percent of
sales in R&D, in line with leading semiconductors companies, it
said. In the second quarter, it spent about 23 percent of sales
Franco-Italian chipmaker STMicroelectronics (STM.PA) will
buy NXP's stake in a joint venture to combine the business with
Ericsson's (ERICb.ST) wireless chip and software unit.
NXP was spun off from Philips Electronics (PHG.AS) in 2006
and is majority owned by a private equity consortium including
KKR [KKR.UL]. Philips still holds about 20 percent.
(Reporting by Niclas Mika and Gilbert Kreijger; Editing by