Teradyne to lay off 65 Mass. workers

Falling chip demand hits N. Reading firm

By Hiawatha Bray, Globe Staff  |  April 18, 2009

Stung by continuing weakness in world markets for microchips, Teradyne Inc. of North Reading will lay off 11 percent of its global workforce, including 65 Massachusetts employees, and cut the pay of top executives.

"We're losing a lot of money. Therefore, we had to take action," said company spokesman Andy Blanchard. Teradyne, the world's top producer of microchip testing equipment, warned last month that it expects to lose between 40 and 42 cents a share during the first three months of 2009. The company blames the losses on the global recession, which has dramatically affected demand for microchips, causing chipmakers like Intel Corp. to reduce their purchases of chip testing gear.

"The market for semiconductor equipment in general, and that includes semiconductor test equipment, has really plummeted," said Blanchard. He said there are a few signs business may soon stabilize, including a statement earlier this week from Intel chief executive Paul Otellini that the worst of the downturn is over.

The layoffs of 350 workers will leave Teradyne with about 800 workers in Massachusetts and about 2,950 workers worldwide. Teradyne will take a $12 million charge in the second quarter to cover worker severance costs.

Teradyne also announced cuts in the base salaries of its executive officers. In a filing with the Securities and Exchange Commission, the company said this will be the third salary cut since October, resulting in an overall executive pay cut of 20 percent.

Hiawatha Bray can be reached at bray@globe.com.