SANTA CLARA –- Marvell Technology Group announced the company is restructuring and will eliminate 900 jobs worldwide.
The maker of semiconductor solutions will refocus its research and development (R&D) to increase operational efficiency and improve profitability. These actions could save the company about $200 million per year.
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.”
Marvell’s restructuring will focus on two areas:
- Discontinuing specific R&D programs, streamlining engineering processes, and consolidating R&D sites for greater efficiency, which will eliminate approximately 900 positions worldwide. The Company also expects a significant reduction in legal and accounting costs. Altogether, these changes are expected to lower annual operating expenses by $180-200 million.
- In addition, the Company 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.
As a result of these actions, the Company 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.”
Founded in 1995, Marvell has more than 5,300 employees.