Vitesse Semi cuts 10% of workforce

By Dylan McGrath, EE Times -- EDN, October 5, 2011

SAN FRANCISCO-Network IC vendor Vitesse Semiconductor Corp cut about 10% of its workforce and consolidated its operations into a single facility at its headquarters in Camarillo, Calif, last week, according to a regulatory filing.

Vitesse had occupied two buildings at its headquarters site. In the filing, made Monday (October 3) with the US Securities and Exchange Commission, Vitesse stated, "We no longer require the use of both facilities."

Vitesse, which employed 467 in 2010, according to Hoovers.com, said it cut about 10% of its workers across multiple departments primarily at facilities located within the US. "We are taking these actions to realize significant expense reductions in line with lowering our breakeven revenue," the company stated in the filing.

Also Monday, Vitesse cut its financial targets for the fourth quarter of its fiscal 2011, which closed September 30. Vitesse said it expects to report sales for the quarter of between $29 million and $30.5 million, down from a previous forecast of $35 million to $38 million. The company said it now expects product margins for the quarter to be between 57 and 59%, down from a previous forecast of 59 to 61%.

"We continue to see softening of global demand as a number of customers manage through existing inventories and curtail purchases due to economic conditions that are impacting performance broadly across our sector, particularly in the Asia Pacific region," said Chris Gardner, CEO of Vitesse, in a statement. "A delay in an intellectual property contract also contributed to our reduced revenue expectation."

Vitesse said it expects to incur about $3.4 million in costs associated with the layoffs in the fourth quarter. Roughly $900,000 will go to severance and other employee termination costs, while about $1.3 million will go to estimated costs for future lease payments on the vacated building, Vitesse said. The company said it also expects to incur about $1.2 million of asset write-downs for tenant improvements at the vacated facility in the fourth quarter.

Last week, Trident Microsystems Inc, a provider of chips for TVs and set-top boxes, announced that it plans to lay off about 20% of its employees out of a so that is can lower its financial breakeven point.

This story was originally posted by EE Times.