The reduction will affect employees in Conexant’s research and development, technical marketing, and sales, general and administrative groups. The reduction is in addition to 200 redundancies previously announced in April.
According to the Red Bank, New Jersey-based company, the fresh round of job cuts is a result of merger-related synergies, after the company closed its acquisition of GlobespanVirata Inc. for $864 million in February 2004.
Another reason for the job cuts is a lower than expected earnings outlook for its fourth quarter (ending in September). For the third quarter ending June 30, the fabless company posted a net loss of $71.4 million, up from a net loss of $49 million, on revenues of $267.6 million.
At the time of the merger, we stated that we expected to achieve significant operating synergies, and that we would eliminate overlapping personnel and functions in our sales, general and administrative groups, said CEO Armando Geday. We also planned to re-deploy, rather than reduce, product development resources in areas where we had redundancies. As a result of our previously announced reduced revenue outlook for the September quarter, we have determined we must now eliminate these resources.
Although absolutely necessary, it is very painful to take actions that affect a talented and dedicated workforce, Geday continued. When complete, these actions and those we previously announced will allow us to reduce our pro forma operating expenses from more than $110 million in the March-ending quarter to approximately $90 million exiting the first calendar quarter of 2005.
The company indicated that affected employees would receive appropriate severance packages.
Last week, Conexant promoted J. Scott Blouin to senior VP and CFO, after Robert McMullan resigned his position for personal reasons.
