Vitesse slashes workforce, dims sales outlook
Vitesse Semiconductor, the Ventura County chipmaker rocked by a stock-options scandal in 2006, has laid off 10 percent of its workforce and shuttered one of its Camarillo facilities.
Vitesse disclosed the pink slips in a regulatory filing Oct. 3. The company said it ended its lease on facilities at 4721 Calle Carga and terminated 10 percent of its 467 employees. The firm will continue to operate from its headquarters on Calle Plano in Camarillo.
The disclosure came the same day that Vitesse shares plunged more than 18 percent after the company said it expects its fourth-quarter sales to dip between $29 million and $30.5 million, below the $35.8 million that Wall Street analysts were expecting.
The company said weak demand among its customers, especially in Asia, was to blame for the lowered sales expectations. Severance packages related to the layoffs and breaking the Calle Carga lease are expected to cost the company $3.2 million in the short run. However, the firm said it reduced its operating expenses by $10 million for 2012 compared with 2011.
The one cost that has not yet fallen is CEO Chris Gardner’s compensation. His total compensation rose from $657,489 in 2008 to $1.4 million in 2010. The company’s shares, meanwhile, have gone from trading in the $14-$16 range during 2008 to trading for less than $5 for much of the past year.
In 2008, Vitesse notched net income available to common shareholders of $16.5 million. In 2009 and 2010, it had a net loss available to common shareholders of $21.6 million and $67.3 million, respectively.
In 2006, Vitesse was investigated for mishandling stock options. The firm eventually paid a $3 million fine to the U.S. Securities and Exchange Commission and a $10.2 million settlement to a group of investors who sued. However, it also won a $22.5 million judgment against KPMG, the accounting firm it fired after the scandal broke, in a lawsuit alleging audit failures.
Vitesse did not immediately return a request for comment.