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Axcelis Technologies lays off 200 after losing $30M

By Cate Lecuyer
staff writer
Published: October 23, 2008

BEVERLY — Axcelis Technologies laid off about 200 employees yesterday, after experiencing a net loss of more than $30 million so far this year.

The company, whose world headquarters is at Cherry Hill Industrial Park, announced a restructuring plan that includes saving $40 million in operating costs through the layoffs, and refinancing its long-term debt.

"This restructuring, while difficult, was driven by the continued slowdown in the semiconductor market," said Chairman and CEO Mary Puma. "... We expect Axcelis to be well-positioned to capitalize on opportunities once the market rebounds."

Axcelis makes tools and technology used in the manufacture of semiconductor chips that go into products like computers, cell phones, cameras and iPods. The company has been in Beverly for more than 25 years, first as Eaton Corp. and then as Axcelis.

One of the area's largest employers, it has more than 1,000 workers at Cherry Hill and a total of about 1,800 overall, at 51 locations in 16 countries.

The loss of 200 jobs affects 14 percent of its employees worldwide.

"We've been very concerned about layoffs, especially in the chip industry, because those are well-paying jobs," said North Shore Community College President Wayne Burton, who is also chairman of the North Shore Chamber of Commerce.

It's important, he said, he keep major employers in the city. There was concern about the future of Axcelis in February, when it turned down a $544 million hostile takeover bid by the Japanese company Sumitomo Heavy Industries. Axcelis and Sumitomo are already partners in another venture, SEN Corp., and have been battling over control of that company, Axcelis said at the time.

In a financial report released in August, Axcelis reported a net loss of $11 million in the first quarter of 2008 and $19 million in the second quarter.

The year before, it made $4.7 million.

"The refinancing is intended to repay convertible debt that comes due in January 2009, as well as to secure sufficient liquidity to finance ongoing operations to weather a prolonged downturn in the semiconductor market," according to a press release from Axcelis.

Burton said a company like Axcelis is especially vulnerable in the international banking crisis because it depends on capital available through interbank lending — which the federal $700 billion bailout package is intended to fix.

Burton said he believes Axcelis will continue to operate in the area, but the declining demand for semiconductor chips isn't helping.

"This downturn has been like a slap in the face," he said.