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The company said it made the cuts because of the continuing downturn in the semiconductor industry.
The company will record a restructuring charge related to the downsizing in its first financial quarter of 2003, which ends on 26 January.
Applied Materials is the world's largest supplier of products to the semiconductor industry, providing systems for processing silicon wafers such as chemical vapour deposition and plasma etching systems. The company recorded revenue of $7.34bn (£4.7bn) for 2001.
Around half the company's orders come from Asia, with Taiwan, South-east Asia and China among its largest customers. Its three technology centres are located in Japan, South Korea and Taiwan.