LSI Logic Corp. plans to reduce its workforce by more than one-tenth by the end of this quarter in a bid to lower its breakeven revenue point to $500 million on a generally accepted accounting principle basis and $450 million on a pro forma basis.
The job attrition started in the first quarter and is expected to conclude in the second quarter with the company laying off 580 staff, or approximately 10% of its labor force, as it struggles to bring its cost structure under control and improve its operating margins.
Those actions weren't enough to pull LSI into positive territory in the first quarter of the year, however, although the company's net loss shrank from the year-ago comparable quarter.
LSI, Milpitas, Calif., said it lost $122.4 million, or 33 cents a share, in the three months ended March 31, compared with a net loss of $171.8 million, or 47 cents a share, in the first quarter of 2002.
The year-ago quarter loss included an excess inventory charge of $41 million, the company said.
Revenue in the latest quarter fell 10%, to $372.8 million, from $412.5 million in the comparable 2002 period although LSI said it sees sales rising 4% to 10% sequentially in the ongoing quarter.
The company blamed the first quarter sales decline on weak end market demand as well as persistent inventory problems within the electronics supply chain.
"Excess retail inventory in consumer electronics led to greater than anticipated seasonality in our Consumer business," said Wilfred Corrigan, LSI Logic chairman and chief executive, in a statement. "Lingering inventory in the enterprise networking supply chain also contributed to a difficult business environment in the first quarter."