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Layoffs planned at Celoxica

Posted: 10 Jul 2002 ?? ?Print Version ?Bookmark and Share

Keywords:C-language design company Celoxica says it will lay off up to 10 percent of its work force this month as it battens down the hatches for an anticipated move into an operating profit in the middle of next year.?

C-language design company Celoxica says it will lay off up to 10 percent of its work force this month as it battens down the hatches for an anticipated move into an operating profit in the middle of next year.

Following last year's closures of C Level Design and Cynergy, two other companies involved in C design, the layoffs raise further questions about the commercial viability of C-language chip design tools. But Celoxica insists it's gaining momentum and is heading toward profitability.

The company, which has headquarters in Abingdon, U.K., and an office in Campbell, Calif., has received the second installment from its fourth round of funding announced last year, but must shrink if it is to make an operating profit by mid-2003, based on current expectations.

"There were strict criteria for receiving the second tranche of funding," said Bernard Morgan, chief financial officer and interim president and CEO. The most recent funding round was "the last round before we were to be profitable," he added. But given the dismal market conditions, "we will need to cut our cloth to achieve that milestone."

The cuts will take the staff worldwide to close to 80. At its peak a year ago, Celoxica had a little more than 100 employees.

Morgan said Celoxica has found a replacement for Jon Treanor, who resigned as president and chief executive officer late last year, and that the company is still growing in terms of license sales. Morgan called the new CEO a "senior EDA figure" and said the company would announce who it is within three weeks, shortly after the layoffs have been finalized. Morgan will then revert to his original role of CFO.

In the last two and a half years, the spin-off from Oxford University research has received $50 million in venture funding, split between its third and fourth rounds. Singapore-based sound card maker Creative Technology is both an investor and a user of the tools. Other customers include military subcontractor Cogent Defence Systems, industrial-controls group Foxboro and troubled comms equipment builder Marconi.

Licensing on the rise

Celoxica claims 600 evaluation licenses and 110 paid-for seat licenses, spread among around 90 customers. "Revenue is doubling year-on-year and we continue to increase licenses," said Morgan.

Will Golby, vice president of communications, said that "a lot of [customers] are doing the early-stage evaluation work. Others are getting to the production stage. We are starting to see customers put real projects together. We have a big hill to climb but we are gaining momentum."

Morgan said the company is sticking to the strategy developed two years ago of converting software algorithms expressed in C into hardware. Handel-C, the company's chosen language, was developed at Oxford.

? Chris Edwards

EE Times





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