PMC-Sierra (Nasdaq: PMCS) fell US$2.15 to $31.78 in morning trading Monday, after the communicationschipmaker said that results for the first quarter ending this month will be lowerthan previously thought.
Citing “weak demand and cancellation of backlog during the quarter,”PMC-Sierra also said it will lay off 230 of its 1,740 employees and take acharge to first-quarter results.
PMC-Sierra said it expects revenue of $118 million to $120 million, with earningsbefore amortization and layoff-related charges totaling 2 to 3 cents pershare. Analysts were reportedly expecting pro forma earnings of 12 cents pershare.
The company said the job cuts involve the “rationalization” of severaldesign centers and properties, beginning Monday.
“We are intensifying our focus on key projects for our customers whiletaking a prudent approach to managing our cost structure,” said PMC-Sierra chairman andchief executive officer Bob Bailey. “Due to current market conditions, it isnecessary that the company reduce a portion of its operating expenses.”
Even with the job cuts, Bailey said, the company will be “aggressivelyexpanding” its portfolio of products for the communications semiconductor market.
PMC’s fourth-quarter 2000 results sparked a host of analyst downgrades after theywere released. The company, based in Campbell, California, said that whilerevenue rose 152 percent from a year earlier, it was just 17 percent aheadof the third quarter as an industrywide slowdown in demand began to takehold.
PMC-Sierra said it plans to report first-quarter results April 19th.