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Vitesse layoffs 10% of staff

Posted: 10 Oct 2011 ?? ?Print Version ?Bookmark and Share

Keywords:network IC? layoff? workforce?

Vitesse Semiconductor Corp. has reduced its workforce by about 10 percent and merged its operations into a single facility at its headquarters in Camarillo, California. In the filing made with the U.S. Securities and Exchange Commission, Vitesse said that it doesn't need to use of both its buildings anymore.

"We are taking these actions to realize significant expense reductions in line with lowering our breakeven revenue," said the network IC vendor that employed 467 last year.

Vitesse also cut its financial targets for 4Q 2011, which closed Sept. 30. The company said it expects to report sales for the quarter to be between $29 and $30.5 million, down from a previous forecast of $35 to $38 million. It expects product margins for the quarter to be between 57 and 59 percent, down from a previous forecast of 59 to 61 percent.

"We continue to see softening of global demand as a number of customers manage through existing inventories and curtail purchases due to economic conditions that are impacting performance broadly across our sector, particularly in the Asia Pacific region," noted Chris Gardner, CEO of Vitesse. "A delay in an intellectual property contract also contributed to our reduced revenue expectation."

Vitesse said it expects to incur about $3.4 million in costs associated with the layoffs in Q4. About $900,000 will go to severance and other employee termination costs, while about $1.3 million will go to estimated costs for future lease payments on the vacated building. The company said it will also incur about $1.2 million of asset write-downs for tenant improvements at the vacated facility in Q4.

- Dylan McGrath
??EE Times

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