Cadence Design Slashes 12% of Workforce

SAN FRANCISCO -- In an expected move, Cadence Design Systems(CDNS Quote - Cramer on CDNS - Stock Picks) announced late Wednesday that it would restructure and lay off 12% of its workforce.

The developer of software for the design of semiconductors will eliminate 625 positions over the coming year.

Cadence said it expects to take a pre-tax restructuring charge of $65 million to $70 million, including $48 million in the third quarter of 2008. The company expects the restructuring to reduce annual operating expenses by $150 million.

For the third quarter, analysts were expecting Cadence to post revenue of $239.3 million and a net loss of $27.2 million.

Shares were down 61 cents, or 12.32%, to $4.34 at the close of the trading on Wednesday.

Cadence apparently plans to reduce or discontinue underperforming product lines.

"In creating the restructuring plan, we emphasized those market segments where Cadence enjoys a leadership position," Senior Vice President Charlie Huang said in a statement. "Going forward, we will focus on excelling in our core business areas."

Cadence is undergoing a major transition due to an expected 30% drop in revenue for 2008. Four senior executives, including the chief executive, resigned in October, just weeks before the companydisclosed it would restate earnings for the first two quarters because of an improper recognition of $24 million.