Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Mark Douglass of Longbow Research. Your line is open.
Mark Douglass - Longbow Research
Good morning, gentlemen.
Craig Creaturo
Good morning
Mark Douglass - Longbow Research
First question is the workforce reductions, are you -- what kind of costs are you incurring? And what kind of savings might you expect? And then also the timing of incurring the costs and when those savings might come down the pike?
Craig Creaturo
Mark, the action that we've taken through the end of December, we expect to have annualized savings. We also include near the overtime reductions that we made, roughly about $5 million per year. We have taken all of the related severance costs for that during this current quarter, during the December quarter. And really those are the manpower changes at least through the end of December that were really needed based on the downturns in our business.
Mark Douglass - Longbow Research
Okay. Can you talk some about what you are seeing from the OEMs? Again, some of the differences regionally, as well as some of the higher versus lower power, can you go into that again?
Craig Creaturo
Okay. The lower power business has really stalled, and I think I indicated in my comments that that business was off 50%. That's new OEM laser builds and I think that's rather accurate. It does not have a trail yet to show that it's going to start to turn up. It is in the marketing, engraving, many consumer-related product processing functions are done with it. So that will have to turn up as consumer confidence returns and I cannot predict that.
Mark Douglass - Longbow Research
And that's across CO2 versus solid-state, all of the above?
Craig Creaturo
Yes, that's a good point. Solid-state, yes. And it's across all continents too, so it's not preferential to the US or Europe or Asia or Japan; all the way across. So then head into high-power OEMs, I would say this is a judgment of myself and some of our people at our company, that high-power, CO2, 5500 such machines are -- have been -- being built each year. That number is probably going to be more like 3000 in the next 12 months. And that's not by any source. Nobody will come out with such a number. I'm trying to set the stage correctly, but that's an important number. I believe the business for us that depends on that out of our high-power portion of our business. About 5%, 7% of our sales for high-power are to that assembly line. The remaining 95% of our high-power sales are into the aftermarket, whether direct through the OEMs or direct to the end customer. So the part that the OEMs play is they are supplying these machine tools to industrial material processing users. And their visibility to what people are going to spend in capital for automotive or steel or brown goods, what the job shops are going to need for new capital, is quite limited now. Their short-term view, the next quarter or so is not good. So we're not able to tell you how much that aftermarket business which goes direct and flows through the OEMs, where it is going to pan out because those are really dependent on utilization rates of how the end-users are running their machines and if they have a need to replace that machine or take it out of service and put in a more highly productive machine. That data is really cloudy, much more cloudy than it's been. September and October, when we reported, I think they still had reasonably good visibility or if they had the visibility to the downturn, they were not talking it up too much. Now I think it's out in the open that that's really confusing everybody in the marketplace and the high-power CO2 field is adjusting. But on the other hand, it's a great product. There are going to be opportunities and we will adjust. I'm just trying to give you the clarity to what we know over the next 90 days, I would say.
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