Fairchild, Delta, Analogic Tech, & Diodes Inc. Announce "Belt-Tightening" Measures
As the current economic situation continues to ripple through the power electronics industry, several major players have announced cuts to their workforces and revisions of their financial outlooks.
Fairchild Semiconductor announced a company wide restructuring that is expected to cut its worldwide workforce by approximately 1,100 people, or 12%. The company expects to incur a total of $12 to $16 million in one time cash charges related to restructuring actions during the current quarter and the first quarter of 2009. These measures are expected to reduce payroll expenses by approximately $33 million on an annualized basis.
Mark Thompson, Fairchild’s President and CEO stated, "We are vigorously managing our business to reduce operating expenses and capital spending to drive cash flow. While current market conditions are definitely a catalyst, the restructuring should be viewed as part of an ongoing commitment to increasing the efficiency of our operations. I especially want to emphasize that our key strategic R&D projects will not be affected. We will continue introducing new high value products as planned."
Advanced Analogic Technologies, Inc. announced that its financial results for the fourth quarter ending December 31, 2008 are expected to be below the company’s previous outlook. As a result of continued deterioration in business conditions, AnalogicTech will expand its cost reduction initiatives and reduce its workforce by approximately 12% by the end of December 2008. This reduction is in response to the current macroeconomic environment and is one of several broad-based cost cutting initiatives the company is pursuing. The resulting annual cost savings are expected to be between $4.0 and $5.0 million.
Diodes Inc. also announced more layoffs amid the downturn and a revision of its economic guidance. Dr. Keh-Shew Lu, President and CEO commented, "With the continued global economic weakness and decreased demand, Diodes has updated its fourth quarter revenue to be in the range of $88 million to $93 million. In addition to the previously announced cost savings initiatives and due to the continued economic decline, we have begun to initiate additional headcount reductions in our international operations in order to reduce our cost base even further. As a result, the company expects fourth quarter GAAP earnings per share to range between $0.26 and $0.31, which includes, among other things, the repurchase of convertible debt, the impact of the cost reductions taken previously, the one-time cost of the additional planned headcount reductions and other required adjustments in accordance with GAAP. The company expects fourth quarter non-GAAP earnings per share to range between $0.04 and $0.08."
Delta Electronics Inc. announced that it plans to reduce its workforce by about 10% next year. The company states that some of its customers were demanding price reductions due to the falling raw material costs and weakened global demand. Delta plans to meet with some of these clients next month to discuss the issue.
