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LSI Logic to cut 1,400 jobs
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January 16, 2002: 11:16 a.m. ET
Chipmaker says it will restructure business, take $50M-to-$70M charge.
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NEW YORK (CNN/Money) - LSI Logic Corp. said Wednesday it will cut 1,400 jobs, or 20 percent of its work force, and restructure its business in an effort to reduce costs and earn a profit.
The semiconductor maker said it will take a related charge in the range of $50 million to $70 million in the first quarter of 2002 to cover these actions.
Officials expect the cost cuts, including consolidating U.S. manufacturing activities and research and development at its Gresham, Ore., operation, restructuring its Japanese manufacturing operations in Tsukubaand, and selling a business that makes wireless handsets, to equal about $30 million per quarter.
"We believe that both our semiconductor component and storage systems businesses have bottomed and we expect our overall revenues to grow in line with the semiconductor industry this year," Chairman and CEO Wilfred J. Corrigan said. "However, we are taking these actions to bring into line our cost structure with our present revenue stream and to return to profitability as expeditiously as possible."
LSI (LSI: up $0.21 to $15.71, Research, Estimates) already has closed manufacturing plants in Colorado Springs, Colo., and Santa Clara, Calif.
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The company also said it will meet its guidance for 2001 fourth-quarter revenue growth of zero to 5 percent over the $397 million reported in the third quarter. It also said it will meet its projection of a pro forma fourth-quarter loss of 23 cents compared with the pro forma third-quarter loss of 29 cents.
LSI Logic will report its 2001 financial results Jan. 23.
-- from staff and wire reports
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