Semi Conscious
Comment
David Ashton
I'd agree in large part Rene, El President's rudeness is at least as great a sin ...
ReneCardenas
Presidente dude, I am trying to figure what is your grip with Arynak, but can't ...
The other shoe drops at Actel
Dylan McGrath
11/8/2010 12:31 PM EST
An unknown number of former Actel Corp. employees were laid off last week after Microsemi Corp. closed its acquisition of the FPGA supplier through a stock tender offer.
The number is unknown because Microsemi prefers it that way. The company declined to state how many employees of the former Actel were let go.
Let's be honest: we knew this was coming. In the aftermath of a merger, because of overlapping corporate functions, a certain number of positions at the combined firm are no longer relevant. Unless you are a Wall Street analyst, you recognize that layoffs are the ugly but reasonable next step for a company to get the maximum value from an acquisition (Wall Street analysts, apparently, see nothing ugly about jobs cuts).
"As is normal during mergers and acquisitions, the Microsemi/Actel acquisition did result in some redundancies is the SG&A [selling, general and administrative] area," said Russ Garcia, executive vice president of sales and marketing at Microsemi. "It is important to reiterate that this will in no way affect the service and support of our customers worldwide."
Fair enough. But we all know that when a company (or a government or a spouse for that matter) plays it close to the vest, it invites speculation. So let's have some here.
During a conference call to discuss the Actel acquisition, Microsemi executives said they would reduce Actel's operating expenses by $15 million, a combination of both R&D and SG&A expenses. "I'm focused like a laser on [taking] 30 percent [of the operating expenses] out of this company, because they can do it," said Jim Peterson, Microsemi's president and CEO.
Clearly, Peterson was talking about cutting 30 percent of Actel's expenses through more than just job reductions, including walking away from trying to compete with Xilinx Inc. and Altera Corp. in areas that dilute profitability. So you really can't conclude from that statement that 30 percent of the Actel work force got cut. (But for the record, Actel's headcount was 563 as of October 2009; 30 percent would be 169).
One former employee who was laid off by Actel last week described the size of the layoff as "massive." The source, who spoke on condition of anonymity, admitted that he lacked enough information to put any kind of numerical estimate on it. But he suggested that a significant number of jobs were cut from Actel's marketing department.
Marketing had been a big focus for Actel in recent years. The company's catchy-if obvious-tagline, "Power Matters," gained traction. Actel often had a significant presence at tradeshows that belied it relatively small size. And the company liked to see its name in the paper, either through purchasing advertising space or making big public relations pushes around new product introductions.
Microsemi, in contrast, is not a company that has been known for marketing. It's obviously well known among potential customers in its core markets, but for a semiconductor company of its size (sales of more than $450 million in 2009), Microsemi makes relatively little noise. (One senior executive at Actel admitted that prior to the Microsemi acquisition announcement he had never heard of the company.)
It's reasonable to conclude that a fair portion of the paring back of Actel that Microsemi did came out of the marketing department. Peterson is clearly focused on keeping costs down, and one thing that an acquiring company always does to a company it buys is try to impose its corporate mindset on its new employees, for obvious reasons.
But, assuming that Microsemi did take the ax to Actel's marketing department (remember, we are just speculating), whether or not this turns out to be a sound strategy remains to be seen. Garcia has said Microsemi will continue to support all of Actel's products, and unlike accounting or human resource functions that may be redundant because of existing employees in Microsemi's corporate headquarters, the dedicated marketing teams around each Actel product have no counterparts in Irvine.
It's clear that Peterson and the rest of Microsemi management plan to tighten Actel's focus and grow its margins. But whether they want to acknowledge that they compete with Xilinx and Altera or not, Microsemi is now for the first time operating in the programmable logic market-an area that, pound for pound, is probably the most marketing-intensive segment in the semiconductor industry.
The number is unknown because Microsemi prefers it that way. The company declined to state how many employees of the former Actel were let go.
Let's be honest: we knew this was coming. In the aftermath of a merger, because of overlapping corporate functions, a certain number of positions at the combined firm are no longer relevant. Unless you are a Wall Street analyst, you recognize that layoffs are the ugly but reasonable next step for a company to get the maximum value from an acquisition (Wall Street analysts, apparently, see nothing ugly about jobs cuts).
"As is normal during mergers and acquisitions, the Microsemi/Actel acquisition did result in some redundancies is the SG&A [selling, general and administrative] area," said Russ Garcia, executive vice president of sales and marketing at Microsemi. "It is important to reiterate that this will in no way affect the service and support of our customers worldwide."
Fair enough. But we all know that when a company (or a government or a spouse for that matter) plays it close to the vest, it invites speculation. So let's have some here.
During a conference call to discuss the Actel acquisition, Microsemi executives said they would reduce Actel's operating expenses by $15 million, a combination of both R&D and SG&A expenses. "I'm focused like a laser on [taking] 30 percent [of the operating expenses] out of this company, because they can do it," said Jim Peterson, Microsemi's president and CEO.
Clearly, Peterson was talking about cutting 30 percent of Actel's expenses through more than just job reductions, including walking away from trying to compete with Xilinx Inc. and Altera Corp. in areas that dilute profitability. So you really can't conclude from that statement that 30 percent of the Actel work force got cut. (But for the record, Actel's headcount was 563 as of October 2009; 30 percent would be 169).
One former employee who was laid off by Actel last week described the size of the layoff as "massive." The source, who spoke on condition of anonymity, admitted that he lacked enough information to put any kind of numerical estimate on it. But he suggested that a significant number of jobs were cut from Actel's marketing department.
Marketing had been a big focus for Actel in recent years. The company's catchy-if obvious-tagline, "Power Matters," gained traction. Actel often had a significant presence at tradeshows that belied it relatively small size. And the company liked to see its name in the paper, either through purchasing advertising space or making big public relations pushes around new product introductions.
Microsemi, in contrast, is not a company that has been known for marketing. It's obviously well known among potential customers in its core markets, but for a semiconductor company of its size (sales of more than $450 million in 2009), Microsemi makes relatively little noise. (One senior executive at Actel admitted that prior to the Microsemi acquisition announcement he had never heard of the company.)
It's reasonable to conclude that a fair portion of the paring back of Actel that Microsemi did came out of the marketing department. Peterson is clearly focused on keeping costs down, and one thing that an acquiring company always does to a company it buys is try to impose its corporate mindset on its new employees, for obvious reasons.
But, assuming that Microsemi did take the ax to Actel's marketing department (remember, we are just speculating), whether or not this turns out to be a sound strategy remains to be seen. Garcia has said Microsemi will continue to support all of Actel's products, and unlike accounting or human resource functions that may be redundant because of existing employees in Microsemi's corporate headquarters, the dedicated marketing teams around each Actel product have no counterparts in Irvine.
It's clear that Peterson and the rest of Microsemi management plan to tighten Actel's focus and grow its margins. But whether they want to acknowledge that they compete with Xilinx and Altera or not, Microsemi is now for the first time operating in the programmable logic market-an area that, pound for pound, is probably the most marketing-intensive segment in the semiconductor industry.
|
|
|
|
|
Navigate to related information
Aryan K
11/9/2010 2:53 PM EST
Hello Dylan McGrath,
I am interested in talking with you about "Energy Harvesting".
I am accessing impact of the energy harvesting and sensor technologies on the future of the semiconductor industry. Does the combination of the energy harvesting, low power design methodologies and remote sensors present disruptive technologies which enable new applications and opportunities?
Can you share with me your thoughts and also if you know of universities, startups or established companies that are working in this arena?
arynak@aol.com
Sign in to Reply
elPresidente
11/10/2010 1:38 AM EST
Instead of Dylan, you might want to talk to one of the marketers that just got laid off on this energy harvesting "accessment" of yours, since you obviously are employed and have no marketing abilities in the slightest and are indifferent to people who have these real skills who are now jobless.
The topic here is a cold, impersonal, LAYOFF, not your own ineptitude. Ever think of getting an MBA? You seem to have the right personality traits.
Meanwhile, go do your own homework.
Sign in to Reply
ReneCardenas
3/5/2011 5:14 PM EST
Presidente dude, I am trying to figure what is your grip with Arynak, but can't place my finger in what is your basis to come down so hard on him. I read his posting as an honest question. So chill ...dude.
Sign in to Reply
David Ashton
3/5/2011 6:21 PM EST
I'd agree in large part Rene, El President's rudeness is at least as great a sin as his perception of Arynak's misuse of the site.
Arynak, in about 2 minutes searching I found Dylan McGrath's email here
http://ubmelectronics.com/editorial-contacts/
so you can contact him directly, also this will avoid putting your own email on a public page where it will be picked up by spammers. Expect lots of offers to share in $10M windfalls and selling you cheap viagra in your inbox...
Sign in to Reply