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Zilog plans to close Nampa, ID plant
70 of 230 workers will be laid off by end of next week
Zilog Inc. will lay off nearly a third of its work force next week and has plans to close its remaining Nampa facility, company executives confirmed Tuesday.
The Idaho Statesman
The electronics firm notified workers this week that 70 of its 230 jobs would be eliminated by the end of next week.
Company officials told employees that the ultimate goal is to close and sell the Nampa plant, although a date has not been set for the closure.
Laid-off workers will receive severance pay depending on the number of years worked, from a minimum of two weeks for up to one year of service, to a maximum of 10 weeks for five or more years at Zilog. The company also will pay COBRA insurance premiums for three months, a company executive confirmed.
“Our hearts go out to the people at Zilog,” Nampa Mayor Tom Dale said. “The layoffs show the need to continue our aggressive approach to economic development so that we can have a diversified economy.”
Zilog´s Nampa plant is a significant contributor to the tax revenues of the city of Nampa, the Nampa Urban Renewal Agency, local fire and ambulance districts, Canyon County and local school districts. It has a market valuation of $26,366,482 or 1.2 percent of the Nampa market.
Its valuation is third highest in Nampa, behind MPC Computers, formerly MicronPC, and Amalgamated Sugar Co.
“Zilog is a long-standing member of the corporate community in Nampa, which we at the city value very highly,” said Todd Bunderson, financial director for Nampa. “The jobs, economic base and name identification have been significant in the company´s long history here.”
Georgia Bowman-Gunstream, CEO and president of Nampa Chamber of Commerce, said the layoffs will hurt other local businesses as well.
“We´ll all feel it, too, because it trickles down to restaurants and retail,” she said.
The news came hard on the heels of 1,030 layoffs at Micron Technology´s Southeast Boise memory chip operation, the bulk of which took place late last week.
Zilog had laid off 50 workers in December. The Nampa facility makes 5-inch silicon wafers and also is the site for one of the company´s design centers. An 8-inch fabrication plant in Nampa was mothballed and 200 workers were laid off last year to cut costs. The California-based company went through a bankruptcy early last year.
Zilog´s Chief Operating Officer Bruce Diamond blamed poor customer demand for the layoffs. He said the company mapped out a strategy last year to ultimately move to a fabless model, contracting out for foundry work now done at its only silicon wafer manufacturing facility in Nampa.
Area economists still were reeling from the Micron layoffs on Tuesday and said the Zilog news was yet another blow to the Treasure Valley economy.
“It seems like there´s a whole bunch of shoes dropping at once,” area economist John Church said. “Even though the numbers are relatively small compared to Micron, this little piece coming right after the Micron announcement is just a severe psychological hit. It´s not good news for the economy.”
Mike Ferguson, the state´s chief economist, said the Zilog workers will have a difficult time finding employment in the tight job market already glutted with other unemployed high-tech workers.
“It´s not a great time to be thrown out of work, particularly if you´re in the high-tech sector,” Ferguson said. “There are some fairly significant uncertainties out there, and folks are unwilling to make decisions involving hiring and capital investments.”
The tech wreck has changed the face of the Treasure Valley technology community, and no large company has gone unscathed.
In the fall, Jabil Circuit in Meridian laid off all 500 employees and closed operations. Some of the valley´s largest employers — from MicronPC to Hewlett-Packard Co. — also have had layoffs over the past two years.
Earlier this month, Zilog reported renewed quarterly losses.
The firm posted a loss of $2.9 million on net sales of $29.4 million for the fourth quarter of 2002, an 18 percent revenue decline from the previous quarter and down 29 percent from the same quarter in 2001. The company had posted a rare profit of $200,000 in the previous quarter and a loss of $62.1 million in the same quarter a year ago.
“Visibility into demand has been difficult, and our outlook remains cautious,” Zilog CEO Jim Thorburn said at that time. Tuesday, Diamond said the aging Nampa facility focuses on the company´s older products that eventually will no longer have a market.
“The technology at that site does not match our future long-term technology roadmap,” Diamond said from the firm´s San Jose, Calif., headquarters.
Diamond said workers at the Nampa site were informed of the decision two months ago.
“This has not been a secret,” he said. “What I don´t know is the timing of it. If the economy picks up, we´ll keep that plant longer. But there´s a cross-over point we still have to figure out where it no longer makes sense to keep that site.”
A company spokeswoman stressed that the layoffs next week are not considered the first step of the ultimate plant shutdown.
“We are certainly moving to mothball that site, but we have no plans to close the plant down tomorrow,” Zilog spokeswoman Diana Vincent said.
The company, which in the mid-90s had about 600 workers at its Nampa operations, has sites in Seattle and San Jose, as well as in India and the Philippines.
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