ON Semiconductor sees charges of $11M-$16M on job cuts

theflyonthewall.com

In a regulatory filing, ON Semiconductor disclosed that on October 6, ON Semiconductor Corporation committed to a plan to close its SANYO Semiconductor backend assembly/test facility located in Hanyu, Japan, commonly referred to as “KSS,” by the end of the second quarter of 2014. Under the Plan, a majority of the production from KSS will be transferred to other company-owned manufacturing facilities. This Plan is being undertaken as part of the company’s overall drive for operational efficiencies and is in line with an ongoing strategy aimed at migrating in-house production to large, high volume facilities. The Plan includes the elimination in workforce of approximately 170 full time and 40 contract employees located at the Hanyu site. These actions are expected to take place over the next nine months and are expected to lower certain of the company’s costs, primarily through operational efficiencies. As a result of the Plan, the company expects to incur cash charges of approximately $11M to $16M. Included in this amount are expected severance costs and related employee benefit plan expenses of approximately $10M to $14M and other exit costs of approximately $1M to $2M. Management expects to see immediate savings associated with the Plan following the closure of KSS and expects such savings to normalize at approximately $4M per quarter beginning one year after the closure.

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