16 Mar 2015
Closure of Chelmsford, Massachusetts, manufacturing and development site will see loss of 45 jobs.
Laser micromachining systems company Electro Scientific Industries (ESI) is to shut its facility in Chelmsford, Massachusetts, with the loss of 45 jobs at the manufacturing and development site.
The move is part of the Portland, Oregon, firm’s ongoing turnaround plan, which includes efforts to streamline operations. Just last month, ESI’s executives suspended dividend pay-outs, with CEO Ed Grady emphasizing that turnarounds “require painful actions” if they are to work in the longer term.
According to an earlier US Securities & Exchange Commission (SEC) filing by the company, activities at the 32,500 square foot Chelmsford facility include manufacturing wafer trim and circuit trim systems used in the semiconductor industry, as well as some development work.
At that time, ESI said that as the streamlining efforts continued, it expected a growing percentage of its final systems to be shipped from its primary manufacturing site, which is in Singapore.
Since that filing, ESI has also acquired the Wuhan, China-based laser company Topwin Optoelectronics for $18 million, and completed the build-out of an advanced development center in Shanghai where it wants to be able to offer customers much faster turnaround times.
Last week the company unveiled its new "GemStone" laser processing system at a trade show in Shanghai. It is based around an 18 Watt short-pulsed ultraviolet fiber laser and optimized for via drilling applications in semiconductor production.
The closure of the Chelmsford site is expected to cost $5.5 million in severance payments to employees and other charges, of which $2 million will be recorded in the company’s current financial quarter that ends later this month.
But by the end of this calendar year, the move should start saving ESI some $4.5 million annually.
“This action will enable us to further focus our efforts on growing our business while consolidating manufacturing facilities and lowering our fixed cost base,” Grady said.
“I would like to express my sincere appreciation to the affected employees for their valuable contributions to ESI. While these moves are difficult, they are a necessary step in our revitalization plan, to position us for future growth and profitability.”
Despite the recent actions, ESI's stock continues to trade close to decade-long lows on the Nasdaq stock exchange. With shares valued at around $6.50 ahead of the latest announcement, the company has a market capitalization of just under $200 million.