14 DAY TRIAL // It appears that Taiwan's largest semiconductor manufacturer, TSMC, has decided to ask its employees to take more unpaid days off, in an attempt to reduce its operating costs, as the impact of the ongoing financial downturn continues to be strongly felt. Such precautionary methods were expected to be taken after the company had to downgrade its forecast of revenues and gross margins for the fourth quarter.
“Although our business performance was in good shape in the first three quarters of this year, business conditions began to deteriorate rapidly in the fourth quarter,” company CEO Rick Tsai explained in a video address to employees.
This is the first time that TSMC officially admits to asking employees to take unpaid leave, as part of a larger plan to cut costs. Speaking of which, the staff at the manufacturing department will be asked to take five unpaid furloughs a month, starting December. This basically means that the number of a paid days per week will be reduced to 6 from 7, which represents a 15% reduction in regular monthly salary, according to sources at TSMC, cited by Digitimes.
However, plans are in place to reduce the number of unpaid furloughs to four, if an employee takes one day off as annual leave. Other departments will also see some of the staff being asked to take one unpaid leave a week, starting in January next year.
“It looks as if that this period of economic slump will continue for a fairly long period of time, and business will become even more difficult for the semiconductor industry,” Tsai added.
The aforementioned plan will also see TSMC lowering the amounts of over-time allowance, as well as reducing the allowance for transportation and health examination for top executives, according to the semiconductor manufacturer. Still, in an attempt to diminish the effects of the cost-reduction plan on the employees, the company plans to distribute in advance some of the annual bonuses for 2008.