A German computer-chip maker will cut more than half its work force in Cary as sales slump, the latest blow to Triangle technology workers.
Qimonda will lay off about 190 of its 300 employees in Cary by early next year. The move is part of a global restructuring that will affect 3,000 jobs worldwide.
Some research done in Cary will be transferred to Dresden, Germany. The remaining jobs in Cary will include support positions for Qimonda's North American operations, such as human resources, finance and sales.
The company set up shop in Cary almost 10 years ago with a staff of about a dozen people, said spokesman Glen Haley. As the facility has expanded, local employees have bonded by playing sports together and working on community projects, he added.
“This is a really tough day for everyone involved,” he said.
Laid-off employees will be given severance pay based on years of service, extended medical benefits and job-placement help, he said.
The news is the latest cost-cutting effort announced by a Triangle tech company. Employers such as Sony Ericsson and Lulu.com are among those eliminating local jobs.
As consumer spending slows, Qimonda is struggling as prices for memory chips used in computers, video-game consoles and other devices have fallen sharply. Amid a global supply glut for such chips, Qimonda also plans to shut down one of its two manufacturing facilities in Richmond, Va.
The company doesn't expect to make additional cuts, but will continue to respond to the “difficult global economic market,” Haley said.
“We've seen, over the last 18 months, the worst downturn in the memory industry history,” he added. “We had an expectation that prices would be stabilizing, but that hasn't happened. Qimonda is realigning itself as a smaller, more streamlined company.”
The company also announced Monday that it is selling its stake in Inotera Memories, a joint venture with Taiwan's Nanya Technology Corp., to Micron Technologies for $400 million.
“The sale of our stake in Inotera is a key step in Qimonda's restructuring, helping to give us a cash influx and sharpening our focus,” Chief Executive Kin Wah Loh said in a statement. “We expect these measures to improve our competitive position and to provide additional strategic opportunities for our company.”
For Munich-based Qimonda, which is majority owned by chip-maker Infineon Technologies, the cash may prove a lifeline. Analysts including Daniel Berenbaum of Cowen & Co. have said the company might not survive the current industry slump, Bloomberg News reported.
The company's American depositary receipts, similar to common stock for foreign companies, have lost 92 percent of their value in the past year. The ADRs closed Monday at 80 cents, down 3 cents.
What is now Qimonda opened its Cary offices in 1999. The company moved its North American headquarters there in 2003 after the state promised up to $9.5 million in incentives. Those incentives, the first offered under the Job Development Investment Grant program, were contingent upon the company creating 400 jobs over five years.
But Qimonda failed to meet minimum job-creation requirements for two consecutive years, and its participation in the incentive program ended in March.
Qimonda received no state grant money. It did get $949,288 for creating 207 new jobs in 2003, 2004 and 2005.