MILPITAS, Calif. -- LSI Logic Corp. today announced it will cut 1,400 jobs, or 20% of its total workforce, while restructuring manufacturing operations in Japan and divesting business units for CDMA handset chips and standard products for digital subscriber line (DSL) communications.
LSI Logic is now negotiating with prospective buyers of its business for code-division multiple access (CDMA) chip sets used in cell phones and DSL broadband communications. No companies were identified.
The Milpitas-based company said cost reductions from its actions are expected to save $30 million per quarter. The layoffs, divestitures, and restructuring of manufacturing in Tsukuba, Japan, will speed LSI Logic's return to profitability by the second half of 2002, according to company officials.
LSI Logic said it will take $50-to-$70 million in charges for the cutbacks and restructuring of operations in the first quarter of 2002.
"We believe that both our semiconductor component and storage systems businesses have bottomed, and we expect our overall revenues to grow in line with the semiconductor industry this year," said Wilfred J. Corrigan, chairman and chief executive officer of LSI Logic. "However, we are taking these actions to bring into line our cost structure with our present revenue stream and to return to profitability as expeditiously as possible."
LSI Logic assured investors that it will meet its guidance for the fourth quarter of 2001 with revenues being flat-to-up 5% sequentially from $397 million in Q3. The company said it will also meet its estimate for pro-forma net loss of $0.23 per share in Q4, which will be an improvement from a loss of $0.29 in the prior quarter. (LSI Logic's pro forma loss in Q3 was $104 million.)
"We are emphasizing our core strengths and concentrating on those parts of the communications, storage and consumer electronics businesses where we have leadership positions," Corrigan said. "At the same time, we have made the decision to divest our CDMA code-division multiple access wireless handset and DSL standard product business units. We are in discussions to sell these businesses."
LSI Logic said it is consolidating its U.S. manufacturing activities and process R&D into the company's site in Gresham, Ore. (see Sept. 19 story). Last April, the company announced the closing of its 8-inch fab in Colorado Springs, Colo., and Santa Clara manufacturing facilities (see April 11 19 story).
The company is scheduled to release its Q4 results on Jan. 23. After posting those results, LSI Logic plans to issue a new guidance for the first quarter.
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