Company Expects to Achieve Annual Operating Expense Savings of at Least $150 MillionSAN JOSE, Calif. -- Nov 05, 2008
-- Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced the commencement of a restructuring program designed to focus 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 eliminate at least 625 full-time positions, representing 12% 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 the second half of fiscal 2009. Cadence expects to record a restructuring charge of approximately $65 million to $70 million pre-tax, $48 million of which will be recorded in the third quarter of 2008.
“The actions that we are announcing today 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 vice president, 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 S. Palatnik, senior vice president, 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.”About Cadence
Cadence enables global electronic-design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2007 revenues of approximately $1.6 billion. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about Cadence and its products and services is available at www.cadence.com