Entropic trims workforce by 18%
Entropic Communications, a provider of silicon chipsets that enable home networking, has laid off 55 employees, which represents 18 percent of the company’s total workforce.
In a filing Tuesday with the Securities and Exchange Commission, San Diego-based Entropic said the layoffs were part of a worldwide restructuring plan and that the affected employees were notified on Monday and Tuesday.
Entropic said its board of directors approved the restructuring plan “to better position the company to operate in current market and financial condition and more closely align operating expenses with revenues.”
As part of the restructuring plan, Entropic will close its locations in Nice, France, and Kfar Saba, Israel, and it has suspended further development of its advanced network processor architecture and an associated product, which was being staffed primarily out of Kfar Saba.
Entropic said the network processor architecture would have been part of a future product offering from the company for home networking applications, but no revenues were anticipated for the product in development until late 2011.
Instead of developing the product in-house, Entropic said it expects to pursue collaborations or partnerships with third parties.
In the filing, Entropic said it currently expects to recognize approximately $900,000 of pre-tax restructuring charges, primarily consisting of employee benefit and severance arrangements. In addition, approximately $200,000 of impairment charges is expected to be incurred as a result of the restructuring plan. The restructuring plan is currently expected to result in cash expenditures of approximately $1.7 million.
Entropic said a majority of the restructuring and impairment charges will be recorded in the company’s operating results for the quarter ending March 31, and Entropic expects implementation of the restructuring plan to be completed in the second quarter of 2009.
Also on Tuesday, Entropic and Cavium Networks announced a broad-based collaboration to home networking platforms that are based on Multimedia over Coax Alliance (MoCA).