Marvell Technology Group to restructure, cut jobs

Marvell Technology Group to restructure, cut jobs

Business news |
By Jean-Pierre Joosting

To achieve this Marvell is discontinuing specific R&D programs, streamlining engineering processes, and consolidating R&D sites for greater efficiency, which will eliminate approximately 900 positions worldwide. A significant reduction in legal and accounting costs is expected. Altogether, these changes are expected to lower annual operating expenses by $180-200 million.

In addition, the Marvell plans to divest non-strategic businesses with approximately $60 million in operating expenses and $100 million in revenue, based on a first half of fiscal 2017 annualized run rate.

Matt Murphy, Marvell’s President and Chief Executive Officer, explained, “The single biggest factor limiting the potential of the Cloud and utilization of billions of connected devices is the bandwidth of today’s technology. By focusing on our strengths in storing, moving, and accessing data at high speeds, Marvell is well-positioned to enable the technology of tomorrow.”

As a result of these actions, the Marvell expects to incur charges of $90-110 million over the next four quarters, including cash charges of $35-50 million. Restructuring and restructuring-related charges include an estimate of severance, asset impairment, lease termination fees, and other costs.

“These are difficult but necessary changes,” Murphy said. “I’m confident these actions will yield a greater return on our R&D investments, deliver the innovation our customers need, and generate the value our shareholders expect.”

Marvell will discuss the restructuring and cost reduction plan in more detail during its next quarterly earnings conference call, which is scheduled following the release of its third quarter of fiscal 2017 results on Thursday, November 17.

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