Former San Diego Chipmaker Lays Off 16 Percent of Global Workforce
In Sunnyvale, CA, yesterday, Applied Micro Circuits Corporation (NASDAQ: AMCC) announced it was making pay cuts and laying off 100 employees in its worldwide workforce. The company, which was founded in San Diego and based here until 2005, now has between 470 to 500 employees around the world, spokesman Gilles Garcia told me.
Some of the planned layoffs will fall in San Diego, where AMCC still operates an engineering and chip design center, although Garcia could not say how many. He minimized the cuts here, saying “To continue to do R&D, we need to protect what we do in San Diego and other design centers.”
The company says the reductions are expected to reduce its annual operating expenses by an estimated $14 million to $16 million in AMCC’s fiscal year 2010, which begins in April.
During the network equipment boom of the previous decade, AMCC reigned among San Diego’s most successful chipmakers. Sales of its semiconductors used in long-haul communication networks hit $435 million in 2001. But AMCC fell mightily in the telecom capacity glut that followed the dot-com bust.
The company expanded its product line to include data storage technologies for Internet data centers, and new CEO Kambiz Hooshmand, a former Cisco Systems executive, moved AMCC’s headquarters to Sunnyvale, CA, in 2005. At that time the company had about 755 employees and a market cap of roughly $780 million.
Now the workforce is less than 500 and the market cap is about $276 million. AMCC’s sales were up 19 percent, to $208.6 million, for the first nine months of its fiscal year—although sales fell by 13 percent during the last three months of 2008. The company said last month that Hooshmand plans to step down as CEO on June 1st, as Paramesh Gopi, AMCC’s chief operating officer, takes over for the next chapter in the corporate saga.