Taiwan's Chi Mei cuts some temporary staff

TAIPEI Dec 17 (Reuters) - Chi Mei Optoelectronics 3009.TW, Taiwan's No. 2 LCD maker, said on Wednesday it has laid off some temporary workers after a slowing economy cut into demand.

Chi Mei, which trails only AU Optronics Corp (2409.TW) (AUO.N) in Taiwan, declined to say how many temporary workers were leaving the company but said its 35,000 permanent employees, including 17,000 staff on the island, were not affected.

"Since late third quarter, the impact from the U.S. financial crisis has been worse than we had expected...and we've never seen such an impact on Taiwan's display industry in history," Chi Mei said in a statement. The company said the dropoff in demand had forced the firm to lower its capacity utilisation rate.

A Chi Mei official said those temporary workers had signed one-year contracts with Chi Mei, and the company asked some of them to leave the company before their contracts expired.

Salaries of Chi Mei's top executives have been cut by 10 percent since October and some employees have taken unpaid leave.

Both AU and Chi Mei, which supply liquid crystal displays (LCDs) to top PC brands Dell (DELL.O) and Hewlett-Packard (HPQ.N) and some TV sellers, have joined other local technology firms in slashing their fourth-quarter guidance.

On Wednesday, AU shares closed up 0.63 percent, similar to the rise on the main TAIEX index .TWII. Chi Mei shares jumped 5.9 percent. (US$1=T$32.7) (Reporting by Baker Li, Editing by Ken Wills)