Cirrus Logic Inc have been trying for over a year to pare down operations in order to focus on chip products for mass storage, multimedia and communications. They haven’t had much success. The Fremont, California company finished a self-described year of focus and transition by reporting a loss of $51.9m for the fourth-quarter on revenue which slipped 8.7% to $212.9m, and simultaneously announcing restructuring plans which include the lay-offs of more than 400 employees – roughly 15% of its worldwide staff. The lay-offs come only a year after the company cut its staff by 13% in March of 1996. They coincide with the establishment of an Office of the President which will focus on the day-to-day operations of the company, and the integration of product operations into four divisions – Personal Computer, Communications, Mass Storage and Crystal Semiconductor. The moves, Cirrus says, were hastened by its slow recovery process – which included the divestiture of what it sees as non-core businesses – and the pressing need to reinvent itself with a new organizational structure. Tom Kelly, chief operating officer in the new Office of the President and former Cirrus CFO, sees the latest maneuvers as the last pieces of the year-long puzzle and says there are no more moves on the horizon. He believes the company is now structured in a way that will allow it to get where it needs to be – profitable. When asked when Cirrus would return to profit, Kelly would say only soon. He predicts revenues for the June quarter to be flat, and a return to growth in September. For fiscal 1997, Cirrus reported a net loss of $46.2m on revenue which declined 20% to $917.2m, compared to a loss of $32.6m for 1996. The results of operations for both the March quarter and the year include a charge of $21m, mostly attributable to the workforce reduction and write-offs of excess assets and facilities, and a charge of $34.5m for anticipated manufacturing capacity changes and inventory writedowns. The latter charge is included in the cost of sales. Without these charges, the loss for the quarter would have been $1.5m, compared to a loss of $88.4m for the same quarter last year.
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