LONDON Configurable processor company ARC International plc will cut up to 60 jobs and a number of its offices around the world following second-quarter losses on growing sales. Twenty or 30 engineers could be affected by the layoffs.
ARC (Elstree, England) said its sales for the second quarter ended June 30 were down about $280,000 from the first quarter, landing at roughly $5.0 million, or slightly below the company's forecast issued in the middle of the quarter. Sales were up 43 percent from the year-ago second quarter.
"Market interest in ARC's technology continues to increase and recent license agreements with major industry players Cypress Semiconductor, Qlogic and Conexant are significant indicators of this," said Bob Terwilliger, chief executive officer for ARC. "However, the challenging market conditions have resulted in customer hesitancy over concluding license agreements and a number of significant deals were def erred at a very late stage in the second quarter of 2001 due to uncertainty in our customers' markets."
Excluding restructuring costs, ARC's net loss for its latest quarter was roughly $8.7 million, compared with about $6.3 million in the first quarter. The company put aside about $4.7 million for reducing office space and jobs in the second quarter. It expects to spend about $1.1 million on cutting jobs and up to $5.0 million on reducing offices in the third quarter.
For the six-month period ended June 30, sales revenue was up 85 percent to about $10 million. The net loss before exceptional charges was about $15.0 million.
The layoffs will be "broadly split among our businesses, pro rata," said chief financial officer Simon Poulton. "There will be slightly less in engineering."
ARC has just under 300 staff, with 166 in engineering, 79 in sales and marketing and 47 in administration. Fifty-four percent of the company's workers are in North America, following its acquisition of three compani es there, 43 percent are in England and the remainder are in Europe.
The company is "not giving revenue guidance going forward because visibility is very poor," Poulton said. "However, in terms of cost, we have taken decisive action. Originally, we intended to short sublet surplus property. But the rental market has dropped so we have reviewed the lease obligations we have. During the second half of the year, we will further rationalize facilities and sublet other space."
Chris Edwards is editor of Electronics Times, EE Times' sister publication in the United Kingdom.