By Neha Alawadhi
Aug 22 Power-management chipmaker ON
Semiconductor Corp said it will cut about 250 jobs and
cancel annual cash bonuses for senior executives, including its
CEO and CFO, to reduce costs in a weak economic environment.
ON Semiconductor, which earlier this month reported
second-quarter revenue below analysts' expectations on lower
orders, is struggling with poor performance at its Sanyo
"The one specific segment that ON is trying to fix is the
Sanyo acquisition. It is a business that has been losing money
since the acquisition," Robert W Baird & Co analyst Tristan
Gerra told Reuters.
The company acquired Sanyo Semiconductor Co Ltd in January
2011 for about $500 million including debt. The division
designs, manufactures and sells radio frequency and
power-related components used in flash memory devices and touch
ON had cut 10 percent jobs in the Sanyo division in the
Sanyo's business was not growing at the time of the
acquisition and it was further impacted negatively by the
Japanese earthquake and the Thai floods, Gerra said.
Japanese companies, which are Sanyo's biggest customers,
have also not been doing well, he added.
Sony Corp and Canon Inc have cut their
full-year operating profit forecast on a strong yen and a weak
Panasonic Corp, another major customer, slashed
workforce by 36,000 last year and is expected to continue
ON expects to complete most of the job cuts in the current
quarter and take a related charge of $11 million to $14 million,
it said in a regulatory filing on Wednesday.
The company had a global workforce of 19,442 last year,
according to its annual report.
A weak spending environment has pushed several chipmakers
into a rough patch, with ON's rivals such as Fairchild
Semiconductor International Inc and Cypress
Semiconductor Corp forecasting weak growth.
ON Semiconductor shares, which have fallen 14 percent since
the beginning of the year, were trading flat at $6.59 on the