Emulex to Reduce Workforce by 10% or 110 People

Emulex Corp. has implemented a restructuring plan designed to streamline business operations with the goal of driving long-term shareholder value.

This restructuring plan is part of the three-part transformation initiative announced last month to improve profitability, increase cash flow and enhance shareholder value.

The restructuring will include a workforce reduction of 110 people or approximately 10%, the consolidation of some engineering activities, and the closure of the company's Bolton, MA engineering facility. These actions are part of an overall plan to reduce costs in the company's core business while allowing continued investment in market expansion initiatives and will result in a more streamlined and focused organization.

The company expects to have the restructuring completed and the transition of the Bolton facility finished by the end of fiscal year 2014 at which time the site will close. This timing is consistent with the cost savings program Emulex announced last month, which is expected to deliver $30 million in annual cost savings in our connectivity business over the fiscal year 2013 spending level, with the full run-rate benefits of the program expected to be realized in fiscal year 2015.

As previously stated:
Emulex expects to take a material incremental charge related to the further operating expense reductions in the company's GAAP results and cash flows for the second quarter of fiscal year 2014. Emulex estimates that it will incur pre-tax GAAP charges in the range of $9 to $10 million in connection with these restructuring actions, the majority of which will be recorded during the second quarter of fiscal year 2014. The restructuring is expected to include between $8 million and $9 million for severance and one-time termination benefits (inclusive of costs associated with the previously announced departure of Jim McCluney), and approximately $1 million for lease termination costs and asset impairments charges. The company reaffirms its previously announced non-GAAP financial guidance for the second quarter of fiscal year 2014.

Author: Anonymous

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