PMC-Sierra Trims Guidance, Workforce

SANTA CLARA, Calif. -- PMC-Sierra, Inc. (Nasdaq:PMCS - news) today announced that revenue and earnings for the first quarter of 2001 will be lower than previously projected due to weak demand and cancellation of backlog during the quarter. The Company is revising its revenue guidance for the first quarter ending March 31, 2001 to between $118 million and $120 million and is projecting pro forma earnings per share of between $0.02 and $0.03 per share, excluding amortization of intangibles and charges related to a workforce reduction.

In response to the slowdown in customer demand, PMC-Sierra will be reducing its workforce by 230 employees. PMC-Sierra currently employs 1,740 people throughout its worldwide operations. This reduction, including the rationalization of several of the Company's design centers and properties, starts today. As a result, PMC-Sierra is anticipating a one-time charge in the first quarter of 2001 that will be detailed in the Company's first quarter earnings release scheduled for April 19, 2001.

"We are intensifying our focus on key projects for our customers while taking a prudent approach to managing our cost structure," said Bob Bailey, chairman and CEO of PMC-Sierra. "Due to current market conditions, it is necessary that the Company reduce a portion of its operating expenses. However, given our reservoir of technologies, our strong balance sheet, and our continuing momentum with design win successes, we will be aggressively expanding our product portfolio for the metro, core, access and wireless segments of the communications semiconductor market in 2001."

PMC-Sierra will be releasing its results for the first quarter of 2001 on the regularly scheduled date of April 19, 2001 after market close.

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