PMC-Sierra Inc. is undertaking a corporate restructuring that is expected to reduce on-going annualized operating expenses by an estimated $20 to $24 million per year. The company's decision to initiate cost reduction activities is part of its on-going effort to improve its corporate operating performance and boost productivity across the organization. The program will include the closure of two of PMC-Sierra’s R&D centers in Winnipeg, Manitoba and Saskatoon, Saskatchewan. The total work force reduction under this restructuring is expected to be approximately 175 positions across the organization. PMC-Sierra currently has 1,183 employees worldwide. The restructuring will begin immediately and is expected to be substantially complete by the end of the third quarter of 2007.
PMC-Sierra estimates the total costs and charges associated with the restructuring will be approximately $12 million to $14 million. These costs and charges include severance costs related to the workforce reduction as well as costs associated with the planned closure of facilities and other related asset write-offs.
"By improving the efficiency of our operations while focusing on our most promising growth opportunities, PMC-Sierra will become more efficient and be in a better position to compete and gain share in our key target market segments," said Bob Bailey, Chairman and CEO, PMC-Sierra. "These initiatives will better align our efforts on our strategic customer engagements in the Fiber To The Home, enterprise storage, and other communications infrastructure product areas."
Regarding current business activity levels, the Company's revenues for the first quarter of 2007 are expected to be between the middle to high end of the range that was provided during the Company's webcast conference call on January 25, 2007 following its fourth quarter 2006 earnings release. At that time, the revenue outlook provided was a range of $98 to $105 million for the first quarter of 2007. Management will provide more details on the corporate restructuring and changes in asset carrying values and related accounting charges during the company's first quarter 2007 conference call scheduled for April 25, 2007 at 1:30 PM Pacific Time.
Click here for more information
