Laid-off NXP workers to see €1.8m EU payout

The EU is stepping up to help employees made redundant by the Dutch chipmaker to find new jobs, under a fund to assist those hit by globalisation

Hundreds of NXP Semiconductor workers who lost their jobs as a result of globalisation are set to benefit from a €1.8m (£1.49m) payout from the European Union.

The European Commission on Tuesday approved an application from the Dutch government for the assistance from the EU Globalisation Adjustment Fund (EGF) in order to help the workers find new jobs. The €1.8m award now goes forward to the European Parliament and the Council of the European Union for their decision.

In total, funding was requested for 590 employees that were made redundant during cutbacks made in 2008 and 2009, mainly from the company's semiconductor fabrication plant in Nijmegen, the Netherlands.

"The market for semiconductors, which is highly sensitive to changes in economic growth, has been seriously affected by the change in world trade patterns and the financial and economic crisis", said Laszlo Andor, EU commissioner for employment, social affairs and inclusion, in a statement.

The European Commission noted that the European chip industry had lost ground to Asia, falling from 14.9 percent market share in 2005 to 11.2 percent in 2009. It also pointed to the strength of the euro against the dollar as a factor.

In September 2008, NXP announced that it would cut up to 4,500 jobs — mainly from manufacturing facilities — as a result of "a challenging economic environment, a weak US dollar and the reduction in size of the company," the company said at the time.

If given the go-ahead, the assistance package will see "512 of the most disadvantaged" former NXP workers receive help such as job-to-job accompaniment, recognition of prior experience, and training and re-training. The total package cost would be €2.8m, of which the EU has been asked to provide €1.8m.

The EGF was first established at the end of 2006 to help people who lose their jobs due to the impact of globalisation. Since the beginning of 2007, it has helped 70,000 workers with approximately €373m of assistance, according to the European Commission. The fund has received applications from Finland and Germany for mobile phone industry losses, from Ireland, Portugal and the Netherlands for changes in the computer and electronics sector, among other areas.

Meanwhile, research firm Gartner said on Wednesday that it expects worldwide semiconductor revenue to reach $300bn by the end of 2010, representing an increase of 31.5 percent in comparison to 2009.

NXP announced on 23 August that it had won the contract to provide the RFID chips for the new German National Identity Card, of which there will be more than 60 million issued over the next 10 years.