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Elantec cuts 15% of jobs
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June 5, 2001: 9:12 a.m. ET
Chipmaker warns on 3Q results, will shutter plants for 2 weeks
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NEW YORK (CNNfn) - Chipmaker Elantec Semiconductor Inc. said Tuesday it is eliminating 15 percent of its work force and shuttering manufacturing plants for two weeks as it warned third-quarter results will be sharply lower than Wall Street estimates due to weakness in its communications business.
Milpitas, Calif.-based Elantec (ELNT: down $2.34 to $31.03, Research, Estimates), which employed 375 people before the layoffs, said it now anticipates third-quarter earnings per share between 6 cents and 8 cents. Analysts surveyed by earnings tracker First Call expected 11 cents.
The company blamed softness in its communications business for a whopping 30 to 35 percent decline in third-quarter revenue from the previous quarter.
Elantec said most of the job cuts will come from its manufacturing operations and that it will halt production at its plants for two weeks in July. Non-operational employees are being encouraged to take 10 days off during the quarter.
The company expects a one-time $2.9 million charge in the quarter related primarily to severance costs and the write-off of excess inventory and obsolete equipment.
Elantec expects to save $800,000 per quarter from the job cuts and $400,000 in the fourth quarter from closing its plants.
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"Although we have been encouraged with positive signs in our video and optical storage businesses, the continued softness and lack of visibility in communications, and xDSL in particular, has led us to take stronger actions to manage our costs and inventories," CEO Rich Beyer said. "We remain positive on the long-term prospects of our DSL business. But due to the severity of the current slowdown across the communications sector, we feel it is imperative to reduce our manufacturing capacity." 
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Elantec
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