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Restructuring befalls Cadence

Posted: 07 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:strategy restructuring? verification? lay off?

Cadence Design Systems Inc. will undergo restructuring, which is designed to refine the company's strategy, streamline the business and improve operational execution and financial performance. Upon completion of the restructuring, the company expects to achieve annual operating expense savings of at least $150 million through a combination of workforce and other expense reductions.

The company expects to slash 625 full-time positions, representing 12 percent of its global employee base, plus a substantial number of contractors and consultants. Because of varying regulations in the jurisdictions and countries in which Cadence operates, workforce reductions will be realized over a period of time and are expected to be completed in 2H 09. Cadence expects to record a restructuring charge of approximately $65 million to $70 million pre-tax, $48 million of which will be recorded in Q3 08.

"The actions that we are announcing will enable Cadence to become a stronger and more focused company," said Lip-Bu Tan, interim vice chairman and member of the Interim Office of the Chief Executive. "The decision to streamline our workforce was made with the utmost care and respect for the hard-working and talented Cadence employees. We believe that with this restructuring we are acting in the best interests of our company and our shareholders."

"In creating the restructuring plan, we emphasized those market segments where Cadence enjoys a leadership position, such as mixed-signal design, advanced verification, and low-power design," said Charlie Huang, senior VP, member and chief of staff of the Interim Office of the Chief Executive. "Going forward, we will focus on excelling in our core business areas, and continuing to serve the needs of our semiconductor and electronic systems design customers as they innovate to create the next generation of electronic devices."

"We are taking decisive action to improve our operational execution and financial performance," said Kevin Palatnik, senior VP, chief financial officer and member of the Interim Office of the Chief Executive. "The focus we are placing on efficiency and productivity, and the resulting restructuring actions, reflect our absolute commitment to improve operating performance."

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