Ixia, a provider of test systems for Internet Protocol-based infrastructure and services, said that it will initiate a company-wide restructuring that is expected to produce annual cost savings of approximately $6m.
The California-based company plans to reduce its staff by 9 to 10% as a part of the restructuring programme. This is expected to be completed by June 30, 2009 with the exception of certain outside contractors who will be retained through July.
The company will record a charge for severance and other related costs of approximately $1m on a pre-tax basis in the current quarter due to restructuring programme.
The company is also expected to write down approximately $1 to $2m of slow moving and impaired inventory in the second quarter.
Atul Bhatnagar, president and chief executive officer, said: “We are taking this action after much internal deliberation. Although we have a strong balance sheet and have remained cash flow positive, the current economic downturn has negatively impacted our revenues and profitability. We continue to be cautious about the economic outlook and we think it is prudent at this time to align our operating costs with our business opportunities.”
Ixia also reiterated its revenue guidance of $35m to $40m for the second quarter of 2009. The company expects to report a loss in a range of $0.05 to $0.10 per share.
