SAN FRANCISCO—Network 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 cut an unspecified number of jobs in April, following the Picochip acquisition.
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.