Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of John Vinh with Collins Stewart. Please proceed, sir.
John Vinh - Collins Stewart
Yes. Can you remind us again what percent of your OpEx is contributed by the tax. And then if you look at your const cutting initiatives, if I heard you right its sounds like you are pretty much going to be looking at OpEx flattish in Q1. How should we be thinking about OpEx at the rest of the year?
Carl Wertz
Give us second on that, John. We have the data. Yes, I think we mentioned on the total expenses, basically, being in the $21 million to $23 million for the first quarter and it's probably a good assumption they will be flattish in the second. And again I think from the total operating expense side that gives us around 28% to 30% may be close to the 30 with R&D in there.
Mark King
No, that's operations including R&D.
Carl Wertz
Yeah.
John Vinh - Collins Stewart
Okay. And then if things continue to worsen are there other cost cutting measures do you think you can take at this point or is this kind of the levels that we should be thinking about for '09?
Keh-Shew Lu
This is Dr. Lu. We do continue to take in the cost reduction effort depend on market. And like I previously announced we are working on the dues, the headcount in the UK and thus during the process, it will not be 100% deflected until end of February.
Okay, and than at the same time we are cutting down the headcount in China manufacturing and the key people reduction would be in January during the Chinese New Year. So typically, we know we have attrition people do not come back to work after Chinese New Year. We know that and we bring in those number, therefore our major people reduction from our manufacturing SKE will be happen majority would be happened in February. So those will not be refract to 100% in the first quarter. Okay, so basically we announced different action to refract market situation, if the market continually deteriorate then we will take even more cost reduction effort.
For example, we have mandatory, people take off fourth quarter in US, fourth quarter is seven day, and first quarter is seven day. We did not announce the second quarter yet and if the market recover, we do not need, if the market are going worse then we will come down another fourth occasion. And the same thing we are working in UK right now. We do not have a agreement yet. We are negotiating with union but the there is another effort of the cost reduction. So we on the global operation, we look at different area then try to take action differently.
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