Marvell looks at layoffs, asset sales in restructuring

Nov. 3, 2016
Semiconductor vendor Marvell Technology Group Ltd. (NASDAQ: MRVL) says it will restructure its operations to decrease its annual operating expenses from the current $1.08 billion to approximately $820 million to $840 million. The move will see the company lay off approximately 900 employees worldwide and explore the sale of non-strategic assets.

Semiconductor vendor Marvell Technology Group Ltd. (NASDAQ: MRVL) says it will restructure its operations to decrease its annual operating expenses from the current $1.08 billion to approximately $820 million to $840 million. The move will see the company lay off approximately 900 employees worldwide and explore the sale of non-strategic assets.

The company hopes to finish the trimming by the end of October 2017.

"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," asserted Matt Murphy, Marvell's president and CEO.

The layoffs will come as Marvell discontinues certain R&D programs, streamlines engineering processes, and consolidates R&D sites. The company did not detail which programs and sites would come under the axe, saying it would offer more details on its upcoming 3Q17 earnings call November 17. However, it did say it expects the actions to trim annual operating expenses by $180-200 million.

Meanwhile, the businesses Marvell hopes to sell account for approximately $60 million in operating expenses and $100 million in revenue, based on a first half of fiscal 2017 annualized run rates. Again, the company did not identify which business would be put on offer.

Marvell currently supplies chips for the automotive, cloud services, Internet of Things, and multimedia applications. These include the AVANTA line of devices for broadband applications (see, for example, "Marvell introduces AVANTA series for broadband optical access") and the Alaska line of Ethernet chips (see, for example, "Marvell offers silicon for end-to-end 25GbE data center networks"). It also supplies semiconductors used in printing applications.

The company expects to incur charges of $90 million to $110 million over the next four quarters, including cash charges of $35-50 million, due to the restructuring. These figures include estimates 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."

For related articles, visit the Business Topic Center.

For more information on communications ICs and suppliers, visit the Lightwave Buyer's Guide.

Sponsored Recommendations

The Pluggable Transceiver Revolution

May 30, 2024
Discover the revolution of pluggable transceivers in our upcoming webinar, where we delve into the advancements propelling 400G and 800G coherent optics. Learn how these innovations...

The Journey to 1.6 Terabit Ethernet

May 24, 2024
Embark on a journey into the future of connectivity as the leaders of the IEEE P802.3dj Task Force unveil the groundbreaking strides towards 1.6 Terabit Ethernet, revolutionizing...

Data Center Network Advances

April 2, 2024
Lightwave’s latest on-topic eBook, which AFL and Henkel sponsor, will address advances in data center technology. The eBook looks at various topics, ranging...

Scaling Moore’s Law and The Role of Integrated Photonics

April 8, 2024
Intel presents its perspective on how photonic integration can enable similar performance scaling as Moore’s Law for package I/O with higher data throughput and lower energy consumption...