The company now expects revenue for the first quarter to be down approximately 25 percent from fourth quarter revenue of $8.7 billion, lower than the previous outlook that first quarter revenue would be down 15 percent, plus or minus several points.
The company’s outlook for gross margin percentage for the first quarter is now 51 percent, plus or minus a couple of points, down from the previous expectation of 58 percent, plus or minus a couple of points, primarily due to lower revenue. Expenses (R&D, excluding in-process R&D, plus MG&A) in the first quarter are now expected to be down approximately 15 percent from the fourth quarter. This is lower than the previous expectation that first quarter expenses would be approximately flat with fourth quarter expenses of $2.4 billion, primarily due to lower revenue and profit-dependent expenses as well as cost cutting measures.
Additionally, the company expects to reduce headcount by approximately 5,000 people over the next 9 months predominantly through attrition. The planned reduction excludes any headcount additions from potential future acquisitions.
