PMC-Sierra Lays Off 176

-January 17, 2003

About 176 of PMC-Sierra Inc.'s employees will be handed pink slips by the end of Q2, the company announced late Thursady.

In a corporate restructuring effort that is expected to cut the communications and storage semiconductor company's annualized operating expenses by $25 million to $28 million per year, PMC will lay off 16 percent of its 1,099-member staff and close excess facilities, among other measures. Specific plants were not disclosed.

Related cost and charges, which will be recorded in Q1 and Q2, have not been determined as of yet.

"PMC-Sierra is preserving and in some cases enhancing our product and technology capabilities as a result of this restructuring," said Bob Bailey, PMC's chairman and CEO, in a statement. "Our goal is to strengthen development efforts in MIPS processors, high-speed mixed signal and sub-90 nanometer design capabilities. However, near-term market conditions for communications semiconductors necessitate that we adjust our business size prudently to focus on returning to a profitable growth track."

Additionally, because of business and market conditions, PMC said it would record financial charges for provisions against the net carrying value of certain investments in venture stage companies and related venture capital funds, inventories and fixed assets removed from service. These charges will be taken in Q4 2002 and are expected to $20 million to $25 million.

PMC said it will release more details on the restructuring on Jan. 23 in its Q4 results.

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