CIMdata PLM Industry Summary Online Archive
10 June 2009
Financial News
Cadence Announces Restructuring
Cadence Design Systems, Inc. announced the commencement of restructuring measures designed to further streamline operations and position the Company for its next phase of strategic growth. Upon completion, Cadence expects to achieve annual operating expense savings of approximately $30 million, through a combination of workforce and other expense reductions. The expected annual operating expense savings take into account additional investments planned for areas of critical importance to the Company’s customers, including verification and system-on-chip (SoC) development.
The Company expects to eliminate approximately 225 full-time positions, representing 5% of its global employee base. The reductions come primarily from resizing the worldwide field organization to current business levels, decreasing the level of investment in the manufacturing side of DFM (Design-for-Manufacturability) and other infrastructure areas of the business. Because of varying regulations in the jurisdictions and countries in which Cadence operates, these workforce reductions will be realized over a period of time and are expected to be completed in the second half of fiscal 2009. Cadence expects to record a restructuring charge of approximately $20 million to $25 million pre-tax, approximately $18 million of which will be recorded in the second quarter of 2009.
“Our top priorities are serving our customers and enhancing value for our shareholders,” said Lip-Bu Tan, President and CEO. “The measures we are announcing today streamline our operations as we simultaneously invest to enhance technology leadership in key growth areas. We are confident that the changes we are implementing will make Cadence a stronger, more focused Company as we emerge from the current economic downturn.”
“Our immediate focus is on our core capabilities, streamlining operations, and preparing for the next phase of Cadence’s growth,” said Kevin S. Palatnik, Senior Vice President, Chief Financial Officer. “Consistent with this focus, we have resized various levels of investment in the business, resulting in the actions announced today.”
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