Marvell Technology Group is divesting unspecified non-strategic businesses, reducing R&D spending and laying off 17% of its workforce -- 900 employees.
Marvell Technology Group Ltd. (Nasdaq: MRVL) plans to complete this restructuring by the end of October 2017. It said it expects these actions will lead to lower annual operating expenses from a current annualized run rate of $1.08 billion to somewhere between $820 million and $840 million.
The company said it intends to cut costs by cutting some R&D programs, streamlining engineering processes and consolidating R&D sites for greater efficiency, all of which will lead to the layoffs. Marvell also expects to cut legal and accounting costs. Marvell estimates it will incur charges of anywhere from $90 million to $110 million associated with the restructuring.
As for the businesses the company intends to divest, it said only that they together represent about $60 million in operating expenses and $100 million in revenue, based on a first half of fiscal 2017 annualized run rate.
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In recent months, Marvell has been identifying itself as "a world leader in storage, cloud infrastructure, Internet of Things (IoT), connectivity and multimedia semiconductor solutions," but in the announcement of its restructuring, the company dropped any mention of IoT and multimedia.
In his canned comment accompanying the announcement, Marvell President and CEO Matt Murphy also skipped mention of IoT and multimedia. "The single biggest factor limiting the potential of the Cloud and utilization of billions of connected devices is the bandwidth of today's technology. By focusing on our strengths in storing, moving and accessing data at high speeds, Marvell is well-positioned to enable the technology of tomorrow," he wrote.
Asked by Light Reading specifically about IoT and multimedia, a Marvell spokesman declined to comment.
The company said it will provide specifics, including the identities of the businesses it is considering divesting, during its regularly scheduled conference call regarding its third-quarter results, which will be on November 17.
— Brian Santo, Senior Editor, Components, T&M, Light Reading