Layoffs coming to Malta's Fab 8

PHOTOGRAPHER: Patrick Dodson

GlobalFoundries' Fab 8 campus in Malta is shown Nov, 11, 2014.

GlobalFoundries is planning a “relatively small” number of layoffs at its Fab 8 complex, as the company copes with a general downturn in the semiconductor industry.

A spokeswoman said Monday that a voluntary buyout program has had some success to reducing the company’s costs in recent weeks, but layoffs won’t be avoided at the company’s flagship manufacturing site.

“While it is still necessary to move forward with an involuntary program, the results of the voluntary program means that the scope of this next step is relatively small, and the impact to most groups will be limited,” said company spokeswoman Erica McGill. She wouldn’t say how many people will be affected, but all impacted employees will be notified by the end of the month.

GlobalFoundries, which is owned by an Abu Dhabi government investment fund and headquartered in Silicon Valley, has been looking to reduce costs at all of its plants. It has factories in Singapore; Dresden, Germany; Malta; and the two former IBM plants it acquired earlier this year in East Fishkill and Essex Junction, Vermont. It has about 18,000 employees worldwide.

There were reports last week that up to 20 percent of the Dresden work force, which is more than 3,000, could lose their jobs. A “few” layoffs are also expected in East Fishkill, the Poughkeepsie Journal reported on Monday.

Fab 8 is the company’s most modern plant, where $11.5 billion has been invested since 2009. It is designed to produce chips with 14-nanometer or even small circuits, for use in smartphones and other devices.

There are about 3,500 permanent employees at Fab 8, which began commercial operations in 2012. It continues to hire for specific technical and engineering jobs, with 22 job postings on the company website on Monday. The industry in general has seen demand and chip prices fall in recent months, resulting in cost-saving measures across the industry.

There have also been losses in construction jobs this year at Fab 8. About 2,500 construction workers were on the site for much of the last five years, but about 1,000 of these jobs have gone away since spring, as the heavy construction phase of the project wound down. The company having no immediate plans to build a second full factory as was once hoped, though it has the needed approvals from the towns of Malta and Stillwater.

“We have taken a number of steps to improve our cost competitiveness over the past few months,” McGill said. “Our efforts have been global, with each organization taking action to drive a cost structure realignment including reductions in (capital expenditures), manufacturing and (selling, general and administrative) costs.”

She wouldn’t say what the specific cost targets were for Fab 8.