Summary
KLA Corporation (KLAC) announced significant cost-saving measures in this 8-K filing dated March 30, 2009. The company is implementing a further workforce reduction of approximately 10%, in addition to a previous reduction announced in November 2008. These actions are aimed at reducing non-GAAP operating expenses to a range of $140-145 million per quarter by the end of calendar year 2009, in response to depressed market conditions. Associated with these restructuring efforts, KLA-Tencor estimates incurring charges between $20 million and $30 million, with a substantial portion to be recognized in the fiscal quarter ending March 31, 2009. These charges include severance costs and expenses related to facility consolidations. Furthermore, the company has amended its Employee Stock Purchase Plan (ESPP), effective July 1, 2009, to eliminate the look-back feature and reduce the purchase price discount from 15% to 5% as part of ongoing expense reduction initiatives.
Key Highlights
- 1KLA-Tencor is undertaking an additional 10% global workforce reduction due to depressed market conditions.
- 2The company aims to lower quarterly non-GAAP operating expenses to $140-145 million by year-end 2009.
- 3Restructuring charges are estimated between $20 million and $30 million, including severance and facility consolidation costs.
- 4A significant portion of these charges will be recorded in the fiscal quarter ending March 31, 2009.
- 5Cash payments related to severance are estimated at $18 million to $22 million, expected to be paid by year-end 2009.
- 6The Employee Stock Purchase Plan (ESPP) is being amended to remove the look-back feature and reduce the discount to 5%, effective July 1, 2009.