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NXP Semiconductors To Shed 4,500 Jobs

Company will close or sell four plants and cut 14.5 percent of its global work force in response to 'a challenging economic environment.'

AMSTERDAM, Netherlands (AP) -- NXP Semiconductors BV said Friday it will close or sell four plants, including one in New York state, and cut 4,500 jobs, or 14.5 percent of its global work force.

NXP, the former chipmaking arm of Royal Philips Electronics NV, said it is responding to "a challenging economic environment, a weak U.S. dollar" and its own decision to sell most of its wireless chip manufacturing operations to STMicroelectronics NV in April.

It said it would spend $800 million to cut the jobs, which will then save the company $550 million per year. The company employs about 31,000 workers worldwide.

NXP said it would close or sell factories in Fishkill, N.Y.; Nijmegen, Netherlands; Hamburg, Germany and Caen, France.

"This restructuring is a tough measure and it is regrettable that we need to let people go," Chief Executive Frans van Houten said in a statement.

"However, the changes will make NXP a strong, profitable and growing company with a positive cash flow."

The company reported a net loss of 312 million euros ($440 million) in the second quarter, down from a 348 million euros net loss in the same period a year earlier.

NXP said it will now focus on making chips for cars and ID cards, among others.

The company suffered a round of bad publicity earlier this year when a Dutch university showed that one of its best-selling chips -- used in 'swipe' cards that grant access to railways and government and corporation buildings -- is vulnerable to hacking.

Philips sold an 80.1 percent stake in NXP to a consortium led by Kohlberg Kravis Roberts & Co. for 4.3 billion euros ($6.3 billion) in August 2006.

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