Xilinx Axes 200 Jobs, Goes For Salary Freeze

US-based programmable chip maker Xilinx, Inc. is cutting its global workforce by up to 200 positions, or 6 per cent, to improve its operating efficiencies. The job cuts, according to the company, will result in a pre-tax charge of approximately $11 to $13 million in the June quarter primarily related to severance pay expenses.
Additionally, Xilinx is implementing other short-term cost savings including executive salary reductions and a broad-based employee salary freeze. As a result, Xilinx expects to generate cost and operating expense savings of approximately $4 to $5 million per quarter beginning in the June quarter.

On 15 April 2009, the terms of employment of all executive officers of the company were amended to reduce their annual base salaries by 10 per cent to 20 per cent, effective 1 May 2009.

From 1 May 2009, Moshe N. Gavrielov, president and chief executive officer, will have his annual salary of $700,000 slashed by 20 per cent to $560,000. The company's senior vice president and chief financial officer, Jon A. Olson's annual base salary of $460,000 would be reduced by 15 per cent to $391,000, effective 1 May 2009.

The foregoing salary adjustments would have no effect on the bonus targets for the company’s executive officers, Xilinx said. The board of directors will also take a 20 per cent cut in their total annual cash compensation.

Over the longer term, the company expects to implement further supply chain efficiencies resulting in additional restructuring charges totalling approximately $10 million over the September, December and March quarters of fiscal 2010. These efficiencies are expected to result in changes to the structure and location of certain global operations, which are expected to provide the company with further cost savings over time.

Restructuring charges would not affect the company's fiscal fourth quarter ended in March. The company is expected to report those results on 22 April 2009. Xilinx is currently in its quiet period.