Sunday December 14, 2008

TSMC to switch employees to 4-day working week from Dec 2008 / Jan 2009

taipeitimes.com :

Taiwan Semiconductor Manufacturing Co (TSMC), the world's top chipmaker on a contract basis, yesterday [3 Dec 2008] asked employees to take unpaid leave to help the company cut costs and combat the industrial slump driven by the deepening economic slowdown. Employees at manufacturing departments have been asked to take five unpaid furloughs a month beginning this month [Dec 2008] on the back of falling factory utilization. Starting next month [Jan 2009], staff in all other departments will be asked to take one unpaid leave a week. TSMC has been forced to take more stringent cost-control measures as it lowered its fourth-quarter outlook in response to shrinking demand. TSMC is considering slashing 20% from its capital spending for next year from US$1.8 billion this year.

- That's a rather wordy way to put it, but 5 unpaid working days per month, or 1 unpaid leave a week effectively equates to a 4-day working week. With 1 out of 5 working days down, that would also mean an instant 20% pay cut. It's good from the company's point of view to save on costs, but it's not so good from the employees' point of view.

I commented to a relative who works there, that if this trend spreads to Chartered Semiconductor or even beyond, this means that they get the day off to do what they want, and they could go looking for some kind of part-time job in the meantime. If there are any to be had in this environment of global economic collapse.

Those with debts to service (home loans, car loans) would be the worst off. They would take the brunt of the impact. If they had been maxing out on their take-home salary, life would be unbearable right about now. Even those who had *not* been maxing out, would find their "margin of safety" drastically reduced or cut to nothing. Now imagine what that would do, on a broader scale, to the consumer-driven economy when (not if) people respond to a shortened working week and lower pay by cutting back on expenses, as they well should. It would be a self-reinforcing feedback loop that drives everything downward. A death spiral. Welcome to the Second Great Depression.

See also :

1. Junk bonds : Chartered Semiconductor debt rating lowered to junk By Fitch
2. Chartered Semiconductor salary cut - all employees pay reduced by 5-10% on economic slowdown
3. Chartered Semiconductor forces block leave, stops bus services, mulls 4-day working week
4. Chipmakers including TSMC, Chartered Semiconductor, SMIC dealt series of blows from global economic slowdown

(2008-12-14 11:14:02 SGT) [Biz] Permalink

Most popular blog postings on lowem.log :

1. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Honda Civic Hybrid preliminary specifications released
4. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004
5. How to insert currency exchange rates into Google Spreadsheets
6. Singapore : Nuclear power not ruled out
7. Live spot gold price quotes chart on COMEX
8. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option

Featured articles on lowem.log :

1. 2010 Honda Civic Hybrid preliminary specifications released
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
4. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
5. New efficient nanotech materials may boost enhanced geothermal power systems
6. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
7. Singapore property market recovery seen as private home sales surge 52% in Jul 2009
8. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004