SiRF Reduces Q1 Outlook, Announces Layoff
Mar 25, 2008 - GPS World
In spite of the current state of the U.S. economy, any number of market analysts and researchers tout the ongoing, near-term strength of consumer demand for personal navigation devices (PNDs) and other GPS technology. But SiRF Technology is telling a different story.
SiRF today said it was lowering its revenue forecast for the current quarter, its fiscal first quarter (Q1) which ends this month, and would lay off approximately 7 percent of its workforce, or about 50 people. The company had forecast revenue between $71 million and $77 million for Q1; now it anticipates that revenue will come in between $60 million and $62 million.
The company further said it would cease product development in the mobile TV market space, noting that the market for mobile TV has been slow to ramp. Most of the engineers associated with this project will be reassigned to other SiRF core technology development programs, the company said.
SiRF cited greater-than-expected softness in product demand, particularly in the personal navigation device (PND) market. It also suggested that economic uncertainty and consumer demand weakness would persist at least for the remainder of the first half of this year. In light of the ensuing restructuring, the GPS chip maker expects to incur pre-tax charges in the range of $1.5 million to $2 million through September 2008.
"Although we had anticipated demand softness in the first quarter, we are disappointed that the expected demand ramp up late in the quarter did not materialize," said Michael Canning, SiRF president and CEO. "Due to the continuing economic uncertainties, we have decided to implement certain cost reduction measures to improve our financial performance in 2008. Although painful, these measures are essential to bring our expenses more in line with the current business. We are focusing our resources on our core businesses and especially on the release and ramp up of new products, such as the SiRFstarIII-GSD3t and the recently launched SiRFprima, which are getting very good customer reception."
SiRF further said it will achieve its 7 percent staff reduction through a combination of immediate lay-offs, elimination of non-essential positions, and attrition. It will also close its South San Francisco and the Stockholm, Sweden, offices by the end of September 2008.
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