Chip equipment maker Applied Materials Inc. said Wednesday it will cut 1,700 positions, or 10 percent of its work force, in response to the downturn in the semiconductor industry.

The global cuts are the latest move by Applied to save money as demand for its equipment has diminished. The company previously reduced salaries, restricted hiring and ordered mandatory days off.

"Unfortunately, the continuing downturn requires us to make some tough decisions to align our operations with current levels of demand for semiconductor equipment," said James Morgan, Applied's chief executive.

Employees will be notified starting Thursday. About 450 positions in the Silicon Valley and 600 jobs in the Austin, Texas, area will be affected.

Santa Clara, Calif.-based Applied will post a restructuring charge for its first fiscal quarter, which ends Jan. 27.

Applied shares closed up 93 cents to $44.87 in Tuesday trading on the Nasdaq Stock Market. After hours, they fell 42 cents.