Raychem cuts 250 positions in Menlo Park
Wednesday June 09, 1999
By Liz Garone
MENLO PARK -- Of the 300 jobs electronics maker Raychem Corp. announced it would cut, 250 will come from the company's headquarters in Menlo Park, spokesman Scott F. Wylie said Tuesday.
The move -- along with others designed to lower manufacturing costs and operating expenses -- comes on the heels of last month's announcement that New Hampshire-based Tyco International will buy Raychem for $3.27 billion.
There was no connection between Tyco's purchase and the decision to cut jobs at Raychem, which currently employs 9,000 people worldwide, with 3,000 of them based in Menlo Park, Wylie said.
"This is an independent action in response to Raychem's business plans for better profitability," he said.
Raychem's net income fell in each of the last four quarters, much of this due to the economic downturn in Asia.
The job cuts will start as early as this summer and could continue as late as next March, Wiley said. Other cost-saving measures include moving some North American manufacturing plants abroad. Raychem also said it will take a $20 million to $24 million charge during the current quarter, which ends June 30. Savings from the measures are expected within a year.
Raychem plans to help employees find other positions both inside and outside the company, Wiley said.
Not much help may be needed. In April, the unemployment rate in San Mateo County was 2 percent.
"It's an exceptionally good time to find another job," said Kim Wallish, director of Collaborative Economics, an economics research firm based in Palo Alto.
While it might be a good time to find a job, it still isn't easy, especially if the person's skills aren't conducive to the new high-tech market, said Michael Curran, director of the North Valley Private Industry Council, which helps retrain displaced workers.
"It can be just as tough as if you're looking for the job in a high unemployment market," he said.
Curran said that, in general, the more skilled and younger one is, the easier it is to make the transition. When cuts are made across the board -- the way they are being made at Raychem -- those people with the most marketable skills are probably not the ones being let go, he added.
New Hampshire-based Tyco, the No. 1 maker of electronic components, announced in May that it will buy Raychem for $3.27 billion in cash, stock, and assumed debt.
On Tuesday, Raychem's stock price fell 3/16 of a point, closing at 35 3/16.The job cut announcement came after U.S. markets had closed. In 1998, Raychem had revenues of $1.8 billion.
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