NXP plans to cut 700 to 900 jobs worldwide

The bad economy and stiffer competition are the main reasons to cut jobs, NXP said

NXP Semiconductors is planning to cut 700 to 900 jobs as part of a reorganization to reduce costs of support services, the company said on Monday.

"The job cuts are part of a larger reorganization," said Guido Dierick, country manager of NXP the Netherlands. Most of the job cuts will come in Western Europe but some jobs will also be cut in the U.S. and Asia, he said.

Dutch IT news site Tweakers first reported the news.

Jobs will be cut in various departments such as the IT, supply chain and planning and administration units, among others, Dierick said. "We took a bottom-up approach," he said. Department heads were asked to review their departments to determine if they could cut any jobs.

"Some forced redundancies will be unavoidable," Dierick said. But NXP expects that some people will leave the company voluntarily. There are also some pensions coming up and in some cases temporary contracts will not be extended, he said.

Because NXP still has to discuss the plans with various European works councils, the number of jobs that will be cut is not definite yet, he said.

There will be no jobs lost in the research and development (R&D) department, nor will factory jobs be cut, Dierick said. NXP is planning to invest in R&D and those funds are aimed to strengthen the development of NFC (Near Field Communication) technology and chips meant for use in passports and drivers licenses, he said.

The poor global economy and increasingly stiff competition are the main reasons for the cuts, Dierick said. These factors are putting pressure on pricing, and lower prices are shrinking margins on products, he said.

While NXP plans to cut jobs the company is also planning to add 180 positions, mainly in R&D, said Dierick.

As part of the process however, NXP is also planning to cut back R&D in "some areas," Dierick said, who declined to comment on which areas that would be. NXP plans to reveal more details within three weeks when it announces its financial results.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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