Tower to lay off 17 pct of Israel workforce -report

TEL AVIV Dec 1 (Reuters) - Israeli chip maker Tower Semiconductor (TSEM.O) (TSEM.TA) has started to lay off 200 employees, or 17 percent of its workforce in Israel, TheMarker financial news website reported on Monday.

TheMarker noted that the layoffs follow Tower's acquisition of U.S.-based Jazz Technologies. In addition, the report said the company will announce later on Monday an unknown number of layoffs at Jazz in the United States.

"Tower continues to implement the cost reduction plan that it announced in the past, a plan that is expected to result in annual savings of $60 million starting in 2009," Tower said in an emailed statement.

"The plan focuses on synergies made possible by the merger with Jazz Technologies such as operational and organisational efficiencies and also includes cost reductions at Tower and Jazz separately."

Tower said it would release an official statement later in the day.

Earlier this month Tower Chief Executive Russell Ellwanger told Reuters that annual cost savings of $60 million would include headcount reduction but he did not say how many layoffs the company planned. (Reporting by Tova Cohen; Editing by Mike Nesbit)