SAN FRANCISCOŚNetwork infrastructure chip vendor Mindspeed Technologies Inc. Monday (July 23) announced plans to cut more than 80 jobs as part of a restructuring plan to reduce costs.
Mindspeed (Newport Beach, Calif.) said the company expects the plan to decrease the company's expenses by about $13 million per year. In a conference call with analysts following the company's quarterly report Monday, Mindspeed CEO Raouf Halim, said the restructuring was undertaken to reduce Mindspeed's focus on traditional wireline applications market. The company will continue to focus on broadband CPE processors, high-performance analog chips and chips for small size wireless basestations.
Halim said Mindspeed's headcount following the layoffs would be about 500 employees. The cuts will be made roughly equally in R&D and general selling and adminstrative operations, mostly related to the company's legacy wireline businesses such as its core network VoIP business.
"These were difficult decisions to make, and we do not take these actions lightly," Halim said. But he said that in order for Mindspeed to be a global leader in the areas where it competes, the company needed to "adapt to evolving market realities."
The layoffs will reduce Mindspeed's operating expenses to roughly the level they were prior to the company's acquisition of Picochip Ltd. earlier this year, Halim said. They will make it possible for the company to achieve pro-forma profitability with revenue of $37 million per quarter starting in the first half of the company's next fiscal year, which begins in late fall.
Mindspeed said it expects to incur $4 million to $5 million in charges related to the layoffs.
Mindspeed reported sales of $35.45 million for the third quarter of its fiscal year 2012, which closed June 29. Sales were up slightly compared with the previous quarter, but down 16 percent compared with the year ago quarter.
Sales for the quarter fell short of consensus analysts' expectations, according to Yahoo Finance.
Mindspeed reported a net loss for the quarter of $6.85 million, compared to a net loss of $14.33 million in the previous quarter and a net profit of $464,000 in the year-ago quarter.
For the current quarter, Mindspeed said it expects sales to be between $33.32 million and $35.45 million, flat to down 6 percent compared with the fiscal third quarter. Analysts had expected Mindspeed to guide for sales of about $35.64 million, according to Yahoo Finance.
Mindspeed said it has begun searching for an independent director from the wireless telecommunications service provider industry to add to its board and help the company improve its position with small cell wireless basestations and other communications and network infrastructure initiatives.
Hey Raouf, at least you have a nice boat built in England!
I guess your aggressive style is resulting in people losing their jobs? Now they get to breathe in the intoxicating aroma of the unemployment office. Nice work sir, well done!
When Raouf Halim, 43, sits at the helm of his $1.7-million, 64-foot Sunseeker, he breathes in an intoxicating aroma of saltwater and new leather. It's the same Italian leather, he says, used in Bentleys.
"What I love about the boat is that it's very consistent with my style: aggressive, fast-paced, technology-oriented," says Halim, chief executive officer of Mindspeed, a company that produces semiconductors for Internet equipment. The 16 pages of custom specifications he ordered for his yacht, handcrafted over 15 months in England, included high-end navigation systems, hideaway plasma TV screens and meticulous cherrywood and birch detailing.
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