Summary
Teradyne, Inc. (TER) has filed a Form 8-K reporting significant cost-reduction measures undertaken as of April 15, 2009, in response to the ongoing decline in semiconductor production equipment orders. The company is implementing a workforce reduction of approximately 350 employees, expected to result in a $12 million severance charge in the second quarter of 2009. In addition to job cuts, Teradyne is further reducing the annual base salaries of its executive officers, including the CEO, effective May 1, 2009. This new reduction, combined with previous cuts in October 2008 and February 2009, amounts to a 20% decrease in executive base salaries compared to 2008 levels. These salary reductions are intended to remain in effect until further decisions are made by the Compensation Committee and/or Board of Directors.
Key Highlights
- 1Teradyne is reducing its workforce by approximately 350 employees.
- 2The workforce reduction is a direct response to the continued industry-wide decline in semiconductor production equipment orders.
- 3The company expects to incur an estimated total severance cash charge of approximately $12 million in the second quarter of 2009.
- 4Executive officers, including the CEO, will see a further reduction in annual base salaries effective May 1, 2009.
- 5Cumulatively, executive base salaries have been reduced by 20% compared to 2008 levels due to three separate reductions.
- 6These cost-saving measures aim to lower the company's overall expense structure.
- 7Exhibit 99.1 provides details on the reduced annual base salaries of executive officers.