MANHASSET, N.Y. Cirrus Logic Inc. said Thursday (Dec. 16) it would reduce revenue guidance for the third fiscal 2005 quarter ending Dec. 25 and implement restructuring actions including reducing workforce and reorganizing its business across product lines rather than functions.
The actions were taken to counteract slowing demand for consumer ICs, particularly converters used in DVD players, according to David French, president and chief executive of Cirrus (Austin, Texas).
Cirrus now expects revenue to top off at $46 million to $47 million, down from previous guidance of $50 million to $55 million. The company reported sales of $51.3 million the prior quarter.
The company also expects gross margin to range from 41 to 42 percent, compared to 51 to 52 percent projected previously. The revised estimate reflects a $5 million net charge for excess and obsolete inventory.
Cirrus expects to take a $5 million to $6 million charge over the third and fourth fiscal quarters for restructuring. The company plans to reduce headcount from 704 to 600 through layoffs and attrition, as well as consolidate several facilities.
In addition, Cirrus said it would implement a product-centric structure with four product lines representing mixed-signal/audio, industrial, embedded, and video products. The former structure, organized along business lines, was no longer needed as Cirrus has exited certain businesses, the company said.