Xilinx plans to cut as many as 200 jobs
* Aiming for savings of $4 mln-$5 mlm every quarter
* Will also freeze salaries as part of restructuring
By Clare Baldwin
SAN FRANCISCO, April 15 (Reuters) – U.S.-based programmable chip maker Xilinx Inc (XLNX.O) plans to cut up to 200 jobs worldwide, or 6 percent of its global workforce, trim executive pay and freeze employee salaries to reduce costs in the middle of a painful recession.
The company said on Wednesday it will swallow a charge of $11 million to $13 million in the June quarter as a result of the restructuring, which would streamline its supply chain and save the company $4 million to $5 million per quarter starting with the current one. [ID:nWNAB3780]
From May 1, President and Chief Executive Moshe Gavrielov will have his annual salary slashed by 20 percent to $560,000 while Chief Financial Officer Jon Olson will earn 15 percent less at $391,000.
All executive salaries will be cut 10 percent to 20 percent beginning May 1, Xilinx said in an exchange filing, but executives remain eligible for bonuses.
The board of directors will also take a 20 percent cut in their annual cash compensation.
“This is in line with what I think normal cost-cutting would be,” said Robert Burleson, an analyst with Canaccord Adams.
“Regardless of whether or not this is the bottom for the computing demand …, this doesn’t mean that there isn’t some long-term lower level of demand that the chip industry is going to experience,” said Burleson.
Wireless infrastructure demand remains strong, Burleson added. Xilinx’s announcement came a month after Xilinx raised its sales outlook, citing better-than-expected demand for mobile gear. [ID:nN03457214]
Chief rival Altera Corp (ALTR.O) had previously also raised its own sales outlook after saying demand for next-generation wireless equipment in China would be stronger than expected.
Xilinx makes chips found in communications network gear, consumer electronics and industrial equipment.
Shares of the U.S. company held steady in after-hours trade after closing at $20.59 during the regular session. (Reporting by Clare Baldwin; Editing by Richard Chang and Steve Orlofsky)