News

5 November 2008

 

Anadigics cuts 15% of workforce

GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has announced that it is implementing cost reduction measures across the company that include the elimination by the end of this week of about 100 jobs (about 15% of its workforce).

Anadigics’ goal is to achieve savings of $15-20m on an annual basis, starting late in fourth-quarter 2008, says Tom Shields, executive VP & chief financial officer. “We believe these actions are prudent in light of the change in quarterly revenue, while preserving our capabilities to meet future customer demand and maintain a strong balance sheet.”

Anadigics’ third-quarter revenue of $58.1m was down 27.8% on Q2/2008 and well short of August's guidance of $62-65m (which was already a revision from July’s initial guidance of $75-81m).

“When we weren’t able to meet some of our customers’ increased demand during the past several quarters, they looked for other sources of supply,” said chairman & interim CEO Gilles Delfassy (who has been chairman & interim CEO since the resignation of president & CEO Dr Bami Bastani in mid-August). “Our third-quarter performance primarily reflects loss of market share [after having to put some customers on allocation].” Previously, in early August, Anadigics had decided to delay the extra investment in its new wafer fabrication plant in Kunshan, China (scaling back from $100m to $50m again) until it has better visibility as to when the fab needs to become operational.

“These cost reduction measures, as we mentioned on our 22 October conference call, align our cost structure with near-term demand while preserving our competitive advantage in technology and product performance,” says Delfassy.

“This was a difficult decision because of the impact it has on people, but was a necessary step in our plan to return the company to growth and profitability as soon as possible,” says Delfassy. “We are continuing critical investments in new products and other strategic initiatives that focus on making our customers successful.”

The staff cuts are expected to result in pre-tax charges related to severance costs and one-time benefits of $2.2-2.4m in fourth-quarter 2008, most of which will result in cash expenditures.

See related items:

Anadigics’ revenue falls more-than-expected 28%

Anadigics’ president and CEO Bastani resigns

Anadigics slashes Q3 revenue guidance from $75-81m to $62-65m

Search: Anadigics GaAs

Visit: www.anadigics.com