KLA-Tencor Announces 10 Percent Reduction in Global Workforce and Other Cost-Saving Actions

MILPITAS, Calif.--(Business Wire)--
KLA-Tencor Corporation (NASDAQ:KLAC) announced today that, in continuation of
its efforts to control costs and in response to depressed market conditions, the
company will reduce its global workforce by approximately 10 percent. This
reduction is in addition to the company`s workforce reduction that was announced
in November 2008. The reduction is one of many cost-saving actions being
undertaken by KLA-Tencor that are designed to help reduce the company`s
quarterly non-GAAP operating expenses to a range of $140-145 million per quarter
by the end of calendar year 2009, adjusted from the company`s previously
announced target of $165-170 million per quarter.

"Although we have been successful in our efforts to reduce operating costs in
late 2008 and early 2009, we must now further reduce our operating expenses in
order to respond to the current demand environment," said Rick Wallace, chief
executive officer of KLA-Tencor. "Today`s reduction in force is an extremely
difficult decision as we realize the effect this action will have on both
impacted and remaining employees."

In addition to the workforce reduction being announced today, the company will
also implement a number of other cost-cutting actions over the next several
quarters, including the consolidation of several of the company`s facilities,
additional forced time off and a reduction in employee stock purchase plan
benefits. However, KLA-Tencor is steadfast in its commitment to maintain a
healthy research and development program and sustain its strategic business
focus. The company remains committed to continuing to innovate process control
technology for customers and optimizing efficiencies throughout the
organization, which KLA-Tencor believes will continue to solidify its market
leadership position and ability to provide superior process control technologies
to its customers.

KLA-Tencor currently estimates that, in connection with the cost-reduction
activities announced today, it will incur charges in the range of approximately
$20 million to $30 million, including approximately $18 million to $22 million
related to estimated severance costs associated with the workforce reduction,
with the remainder of such charges related to facilities consolidation. A
significant portion of these restructuring charges will be recorded in
KLA-Tencor`s fiscal quarter ending March 31, 2009. KLA-Tencor estimates that the
restructuring measures announced today will result in approximately $18 million
to $22 million in cash payments (reflecting the estimated severance costs
associated with the restructuring), which KLA-Tencor believes will be paid out
by the end of calendar year 2009. The remainder will be a non-cash
accounting-related charge associated with facilities consolidations.

The company anticipates incurring additional restructuring charges, which will
likely include severance costs, lease termination charges, other exit costs
associated with facility site consolidations or closures, and other related
expenses in connection with the cost reduction actions announced today through
the remainder of calendar year 2009, but is unable to estimate the aggregate
amount of such additional charges at this time.

Forward Looking Statements:

Statements in this press release other than historical facts, such as statements
regarding the anticipated size of KLA-Tencor`s reduction in its workforce, the
expected timing of the implementation of the company`s cost reduction
activities, the estimated costs associated with such activities, the anticipated
benefits that such activities will have on the company`s operating results and
competitive position, the company`s expected level of operating expenses in
future periods, the company`s implementation of additional cost reduction
activities in the future, the company`s future market position and the impact
that the present cost reduction efforts could have on the company`s ability to
preserve its competitive position, the company`s ability to continue to improve
its technologies, the company`s future research and development efforts, and
future customer demand for the company`s products are forward-looking
statements, and are subject to the Safe Harbor provisions created by the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based on current information and expectations, and involve a number of risks and
uncertainties. Actual results may differ materially from those projected in such
statements due to various factors, including but not limited to those associated
with costs and delays related to compliance with U.S. and international labor
and other laws, including notification procedures required thereby; the
company`s ability to consolidate its facilities on favorable terms, including
sales terms with respect to any properties that may be sold and lease
termination costs with respect to any leased properties; future developments in
the semiconductor industry, capital markets and the global economy; the
effectiveness of the company`s other efforts to reduce its operating expenses;
demand for the company`s products; the results of the company`s product
development efforts; disruption from the workforce reduction and its potential
impact on research and development efforts and company relationships with
customers and vendors; the introduction of new products by the company`s
competitors; acceptance of the company`s products by its customers; and other
similar factors. For other factors that may cause actual results to differ
materially from those projected and anticipated in forward-looking statements in
this release, please refer to KLA-Tencor`s Annual Report on Form 10-K for the
fiscal year ended June 30, 2008, subsequently filed Quarterly Reports on Form
10-Q and other filings with the Securities and Exchange Commission (including,
but not limited to, the risk factors described therein). KLA-Tencor cannot
provide any assurance that its future results will meet expectations, and the
company disclaims any obligation to update information contained in any
forward-looking statement.

About KLA-Tencor:

KLA-Tencor Corporation is the world`s leading supplier of process control and
yield management solutions for the semiconductor and related nanoelectronics
industries. Headquartered in Milpitas, California, the company has sales and
service offices around the world. An S&P 500 company, KLA-Tencor is traded on
The NASDAQ Global Select Market under the symbol KLAC. Additional information
about the company is available at http://www.kla-tencor.com. (KLAC-C)

KLA-Tencor Corporation
Investor Relations:
Ed Lockwood, 408-875-9529
Sr. Director, Investor Relations
ed.lockwood@kla-tencor.com
Media Relations:
Meggan Powers, 408-875-8733
Sr. Director, Corporate Communications
meggan.powers@kla-tencor.com

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