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El Segundo Electronics Firm Will Cut About 600 Jobs

January 25, 2003|David Colker | Times Staff Writer

El Segundo-based electronic component maker International Rectifier Corp. will lay off approximately 600 workers, or about 10% of its worldwide workforce, and close five plants as the technology sector continues to struggle through a rut.

Officials would not disclose Friday which of the company's 14 plants -- in California, New England, Mexico and several European countries -- would shut down until employees were notified next week.

"I can't give specifics, but we are retaining the vast majority of positions in California," said Robert Grant, who oversees marketing for the company, which has been making components since 1947. "We are shifting our production to our lower-cost higher-tech facilities."

This week, the company announced it lost $121.3 million, or $1.90 share, in its fiscal second quarter ended Dec. 31. In the period a year earlier, the company had a profit of $10.8 million, or 17 cents a share.

International Rectifier is best known for manufacturing semiconductors, but Grant said the company would shift its focus to concentrate more on specialized products such as those that regulate power in laptop computers and in automobile steering and fan control systems.

The restructuring, announced in December, is expected to reduce annual costs by $80 million to $85 million.

The cutbacks did not take industry analysts by surprise.

"Given conditions in the chips industry, layoffs and restructuring are a part of everyone's process," said Rao Aisola of Bear, Stearns & Co. "It had been expected that technology sales would be rebounding by now, but they did not ramp up. So now changes have to be made, and the first place that often happens is in the workforce."

Aisola said he doesn't own International Rectifier stock and his firm doesn't do investment banking with the company.

International Rectifier shares fell 58 cents Friday to $19.92 on the New York Stock Exchange. The stock has declined about 40% in the last year.

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