Samsung lays off hundreds for project

AUSTIN (KXAN) - Samsung Austin Semiconductor in northeast Austin has announced the layoff of 500 employees. The chip manufacturer plans to upgrade and combine its existing semiconductor fabrication plants to a single new facility. When it reopens in late 2010, Samsung will hire 185 new employees.

Operations will shut down in October with the project starting in early 2010. Although initially that means fewer jobs the Greater Austin Area Chamber of Commerce says the new design plan will boost Austin’s economy.

 "From accountants to security to landscaping to everything, it’s going to create a bigger need throughout the community," said Dave Porter of the Greater Austin Area Chamber of Commerce.

 Samsung will spend a half billion to retool the semiconductor plant in Austin. 700 construction workers will be hired temporarily. However, the chamber of commerce believes ripple effect will mean even more jobs.

“In the long run it is going to generate over 5,000 jobs," said Porter.

Samsung is investing in new technology that will allow them to make more chips for things like your cell phone and ipod.

"You don't need as many people you have a lot of robots back there,” said Bill Cryer, Samsung Public Relations. “That lowers our cost of course it also makes the manufacturing process more efficient."

 The company will be combining the two plants they have now into one larger plant where they will manufacture 12" wafers with nearly twice as many chips as the current 8’’ wafers do.

The employees will be getting help transitioning to another job because Samsung has teamed up with Capital IDEA a non profit that also works with Austin Community College.

“Identify what we consider emerging careers or identify retraining opportunities and make those available,” said Ron Modesty, Employment Coordinator for Capital IDEA.

Although most positions being cut are for low-skilled workers, they may be able to move to another field, with a little additional training.

“Renewable engergy is an option,” said Modesty. “A lot of the same skills they use here can be used in those areas as well another area that is very popular is public utilities."

The 500 laid off employees have also been given a 60-day notice and severance package.

The upgrade will require current operations to stop in October to allow reconstruction of the manufacturing area and the re-equipping of the tool set.Samsung operates two fabrication plants in Austin. The one slated for upgrading is 12 years old, which the company said is the expected life span for such plants.

The South Korean-based company opened a second manufacturing facility in Austin.