This cuts at Qimonda come on the heels of other local layoff in Richmond’s manufacturing sector. Economic development agencies will likely tweak their marketing pitch for the fall season.
Greg Wingfield knew local computer chip manufacturer Qimonda wasn’t doing well.
As the president of the Greater Richmond Partnership, an organization that works with local economic development departments to attract new employers, Wingfield been tracking the industry for more than a year and saw the writing on the wall – or via online message boards, as the case was.
Even before Qimonda announced a 10% reduction in its workforce in April, Wingfield knew that with a rock-bottom price for the company’s memory chips, the company could only hold out for so long.
And Wingfield wasn’t surprised when Qimonda announced Monday that it was closing one of its Eastern Henrico chip plants and laying off around 1,200 workers. A Qimonda press release states that the company aims to finish the closure by January.
The company had been losing money for the last several quarters. One source at Qimonda who is not allowed to speak on behalf of the company said that the equipment inside the plant has labels from the banks that have lent the company money and count the equipment as collateral.
Qimonda will also lay off 190 people in Cary, NC, its North American headquarters. Qimonda makes a kind of computer memory called DRAM, which stores data. The memory is widely used in personal computers and other devices. The market for DRAM is flooded with too many chips, which has driven down the price too low to make a profit. Qimonda has been an unprofitable company for the last several quarters.
The cuts amount to 1,200 out of around 3,000 local employees.
Wingfield said the Partnership will likely tweak its marketing efforts to lure new manufacturing plants.
“A rapid response team opened an office to see what we can do to be able to get a summary of skill sets that are coming out of Alcoa and Qimonda, and so we can package that as part of an outreach marketing,” Wingfield said.
VCU is also working to set up some kind of program to help VCU alums find work. Mike Eisenman, director of the Business and Engineering Career Center at VCU, said Qimonda has more VCU engineering grads than any other local employer. The cutbacks will staunch a pipeline that plugged in VCU engineers with high-paying, local jobs.
This cuts come on the heels of other local layoff in Richmond’s manufacturing sector. In September, Alcoa announced it closing the Richmond plants that produced Reynolds Wrap and was laying off around 500 factory workers. There have also been layoffs in home building and marketing/advertising.
The unemployment rate for Richmond rose to 5% in August, and it’ll likely go higher. That’s up more than 50% from 3.2% in August of 2007 but is lower than the 6.1% unemployment rate for the nation as a whole.
While layoffs can in quick fits, economic development efforts generally take longer to take hold.
Wingfield said he and fellow economic developers have a “robust strategy” that includes extensive travel in Europe. “Because of the weak dollar, we’re getting a lot of interest from international companies,” he said.
“While we won’t be doing more (the calendar is already booked with 50 events), we may be more targeted in what we’re doing to respond to the current situation,” Wingfield said.