Magma Design Automation Announces Cost-Cutting Actions Expected to Save $20 Million

SAN JOSE, Calif., Feb. 5, 2009 (GLOBE NEWSWIRE) -- Magma Design Automation Inc. (Nasdaq:LAVA), a provider of chip design software, today announced a series of actions designed to reduce operating costs, including a 17 percent cut in worldwide employment, salary reductions and consolidation of some facilities. These measures, initiated in the third and fourth quarters of Magma's fiscal year 2009, are expected to reduce total annual costs by approximately $20 million in fiscal year 2010. In connection with these measures, Magma expects to record restructuring charges ranging from $2.75 million to $3.75 million in its fiscal 2009 third quarter, ended Feb. 1, 2009.

"We are taking steps necessary to align our expenses with the revised business outlook we announced in December, reflecting the state of the global economy," said Roy E. Jewell, Magma president and chief operating officer. "These actions affect company operations in all geographies and in all departments but will focus our resources to maintain Magma's competitive advantages in our key business segments."

In addition to reducing employment levels, Magma instituted a 20 percent salary reduction for senior management during the third quarter, followed by a smaller salary reduction for most other employees. Magma closed two sales and support offices in North America and one in Europe, and plans to consolidate its Beijing, China, operations into a single facility and its Shanghai, China, operations into a single facility. With these closures and expected consolidations, Magma will continue to operate in 11 countries with facilities in 19 cities.

"Our cost-cutting actions are intended to enable us to remain competitive and deliver the financial results we've targeted regardless of when the economy recovers," Jewell said. "Discussions with major customers during the last several quarters confirmed that the actions we're taking now are in the best interest of our company's stakeholders for both the near and long terms."

Magma will provide details on the cost-cutting actions when it announces third quarter financial results. In a separate announcement, Magma today said it will issue third quarter results and conduct its quarterly earnings conference call and webcast on Feb. 26, 2009.

About Magma

Magma's software for designing integrated circuits (ICs) is used to create complex, high-performance chips required in cellular telephones, electronic games, WiFi, MP3 players, DVD/digital video, networking, automotive electronics and other electronic applications. Magma's EDA software for IC implementation, analysis, physical verification, circuit simulation and characterization is recognized as embodying the best in semiconductor technology, enabling the world's top chip companies to "Design Ahead of the Curve" while reducing design time and costs. Magma is headquartered in San Jose, Calif., with offices around the world. Magma's stock trades on Nasdaq under the ticker symbol LAVA. Visit Magma Design Automation on the Web at

Magma is a registered trademark and "Design Ahead of the Curve" is a trademark of Magma Design Automation Inc. All other product and company names are trademarks or registered trademarks of their respective companies.

Forward-looking Statements: The statements above regarding the amount of estimated expenses and charges of the cost-cutting actions and related activities, anticipated timing for paying such expenses and recording such charges, expected reduction in annual costs, plans to consolidate certain offices, actions that Magma is taking now are in the best interest of its stakeholders for both the near and long terms, and the ability to remain competitive and deliver the financial results Magma has targeted are forward-looking statements based on current information and expectations and involve a number of risks and uncertainties. A number of factors could cause actual results to differ materially from these statements, including but not limited to larger-than-projected costs and difficulties in implementing the reduction in operations on the timetable currently contemplated, changes regarding expected forecasts and actual revenues, changes in estimates regarding expenses and charges of cost-cutting actions, and changes in the competitive landscape. Magma undertakes no additional obligation to update these forward-looking statements. Please refer to Magma's filings with the Securities and Exchange Commission, including but not limited to Magma's most recent Quarterly Report on Form 10-Q for additional factors. These filings can be accessed via the Internet at

CONTACT:  Magma Design Automation Inc.
          Press Relations
          Monica Marmie, Director, Marketing Communications
            (408) 565-7689 
          Investor Relations
          Milan G. Lazich, Vice President, Corporate Marketing
            (408) 565-7706
Email Contact



Review Article Be the first to review this article

SolidCAM - Break The Chains

Featured Video
Mid-Level Mechanical Engineer for Kiewit at lenexa, Kansas
Mechanical Engineer for Allen & Shariff Corporation at Pittsburgh, Pennsylvania
GIS Data Analyst for CostQuest Associates, Inc. at Cincinnati, Ohio
Upcoming Events
29th Design Engineering & Manufacturing Solutions Expo (DMS) at Tokyo Big Sight 3-11-1 Ariake, Koto-ku Tokyo Japan - Jun 20 - 22, 2018
ACMEE 2018 at Chennai Trade Centre Mount Poonamallee Road, Nandambakkam Chennai India - Jun 21 - 25, 2018
Inside 3D Printing Seoul 2018 at Korea International Exhibition Center (KINTEX), Hall 5 408 Hallyuworld-ro, Ilsanseo-gu, Goyang-si, Gyeonggi-do Goyang Korea (South) - Jun 27 - 29, 2018
Kenesto: 30 day trial

Internet Business Systems © 2018 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise