TranSwitch Corporation announces workforce reduction
TranSwitch Corporation has announced a workforce reduction that is being implemented in two phases. The majority of approximately 20 employees affected will leave the Company by the end of first quarter, 2007 and a small group will stay until the end of second quarter, 2007. This workforce reduction primarily affects U.S. Research and Development personnel based in Shelton, CT and Bedford, MA
."TranSwitch's objective is to break even during its third quarter of 2007, and the expense reduction step taken here is essential for the Company to meet this objective," stated Dr. Santanu Das, President and Chief Executive Officer.
"We believe the Telecom industry is in recovery mode, and the industry has made good strides in the last two years as evidenced by the return-to-profitability of a few equipment vendors. However, ongoing industry consolidation among both carriers and equipment vendors complicates the near-term demand outlook for the sector. We believe that the overall wireline communications environment will remain challenging through the first half of 2007 as these consolidations are completed," continued Dr. Das.Overall. Roughly 16% of TranSwitch's U.S. workforce is impacted by this action. The Company expects the operating expense savings to be roughly $2 million per year, and that these savings will begin to be recognized by the Company's 2007 third quarter. The Company expects the restructuring costs associated with the workforce reduction to total approximately $1 million in cash, which reflects the costs of employment terminations.
