National Semi cuts 130 jobs, expects $10M charge

Analysts do not expect this week's layoffs to have a negative impact on National's May quarter results.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 4/30/2008

National Semiconductor Corp Tuesday announced plans to cut another 130 jobs, primarily in product line and support functions.

The cuts come after the analog company in January announced it would eliminate approximately 200 positions from three of its fabs and dispose of certain manufacturing equipment, costing National some $20 million in charges.

In the current fourth fiscal quarter, ending May 25, National expects to record approximately $10 million of charges for the 130 employee layoff, principally for severance. 

National currently employs approximately 7,300 people worldwide.

The Santa Clara, Calif-based company is scheduled to announce its fiscal Q4 financial results on June 5. While the National’s January layoffs were followed by a weaker revenue showing than expected for the company’s fiscal Q3, analysts do not expect this week’s cuts to have a negative impact on National’s May quarter results.

“While the restructuring in January preceded a revenue miss in February, we believe fiscal Q4 is tracking solidly inline with our consensus estimate of $450 million due to a stabilization in handsets and modest growth in the broad markets (ie industrial and communications),” Lehman Brothers semiconductor analyst Romit Shah wrote in a research note this morning. “We think the restructuring announcement backs our view that National is likely to generate positive operating leverage starting next quarter.”

National in March guided for fiscal Q4 revenue between from $440 million to $460 million.

National said it is making the job cuts to better align its resources and focus on accelerating revenue growth in key market areas that require better power management and energy efficiency. The company also stated that it plans to continue to develop its PowerWise brand of analog products.