Telefunken Semiconductors International to Cut 40+ Jobs

The odds are good that, despite the recent scandals surrounding the company, which you have not heard of Telefunken Semiconductors International. For the majority of us to whom this is a new name, let begin with a look at how the company describes itself, “TELEFUNKEN Semiconductors offers world class analog & mixed-signal foundry services and is worldwide leader in the design and manufacture of energy-efficient integrated circuits for power management and high-performance interfaces. With its 8-inch fabrication plant in Roseville, California and 6-inch fabrication facility in Heilbronn, Germany, the company can manufacture in a large array of versatile processes which address analog, mixed-signal and specialty technologies from deep-submicron to high-voltage CDMOS processes especially designed for power management applications.” Now that we are up to speed on what the company is, lets talk about what they are doing.

Well it looks like bad new is coming to the workers at the Roseville location where everything will not be coming up roses, but will be coming up layoffs instead. The company is looking to trim back on between seven and nine percent of its staff. In real numbers that is somewhere between 40 workers and 50 workers who are going to put out of a job when all is said and done. In a company that only employs 600 at this location that loss is going to be felt.

A memo was recently sent out to the workers in order to help them to prepare for the layoffs that are to come. In this memo, originally reprinted in this article by a reporter for the Sacramento Bee, Roger Lee, who currently holds the position of both the interim president and chief executive of the company, had the following to say about the cuts, “Unfortunately, given our current cost structure and the extent of liabilities incurred over the past year, our cash situation will continue to be challenging until such time that we can introduce new business and expand our revenue base.”

The company’s serious finical distress comes at the hands of two of its highest-ranking members. Both Subbarao Pinamaneni, the former CEO of the company and Raj Johal, the former President of the company, are being sued by the current management of Telefunken. The company alleges that these two executives worked together to illegally take more than $22 million from the company’s coffers. The layoffs are being billed as the direct result of this loss of revenue. For the moment the legal action is pending and the company would be wise not to expect to recover its funds in a timely manner, should the judge rule in their favor.

In this case the company is in a rather interesting position. If the company chooses to layoff only 40 workers, or seven percent of the workforce, then they can simply send those worker on their way. If however they choose to cut back 50 workers, or nine percent of the overall workforce at this facility, the these cuts will qualify as a mass layoff action and some special rules will apply.