Sigma Designs cuts jobs, lowering expenses
MILPITAS, Calif. (AP) — Sigma Designs Inc. said Wednesday that it is cutting an undisclosed number of jobs and is lowering its operating expenses as part of a broad restructuring plan.
The company, which designs semiconductor technology used in set-top boxes, connected TVs and media players and security systems, said that the job cuts and other related actions will lower its annual labor costs by approximately $26 million.
Other operating expenses will be lowered by about $14 million. Sigma also plans to move to lower-cost manufacturing components and processes, which are expected to produce annual savings of approximately $5 million. In addition, it is looking at strategic options for several research and development programs.
Sigma expects its restructuring actions to result in about $45 million in cost savings in fiscal 2014. It foresees an initial restructuring charge of $1 million in its third quarter, mostly tied to the job cuts. The company expects to take additional charges in the fourth quarter, but did not say how much those would cost.
The restructuring plan is anticipated to include several phases and is expected to be fully implemented by the end of the current fiscal year.
Sigma said its goal is to return to an adjusted profit in the first quarter of the fiscal year starting Feb. 3, 2013.
Shares of the company rose 5 cents to $5.91 in afternoon trading. Its shares have risen 27 percent from a 52-week low of $4.65 in mid-April.