The early termination of the contract will reportedly cost 30 former Tower employees, who were employed by HP Israel on the project, their jobs.
Sources inform ''Globes'' that Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) has cancelled its outsourcing contract with HP Israel Ltd. for enterprise computer infrastructure services, after just two years of the seven-year contract. The contract was for $26 million. The early termination of the contract will reportedly cost 30 former Tower employees, who were employed by HP Israel on the project, their jobs.
Although the recent period has been tough on large computer projects, this was apparently not the reason for the Tower-HP Israel's cancellation, nor were the parties dissatisfied. The reason was much simpler: Tower is no longer the same company that it was two years ago. Its acquisition of Jazz Semiconductor Inc. of the US last year has turned Tower around, and it apparently now prefers to rely on its new capabilities than outsourcing them.
Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2009
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