Electronic design automation software house Cadence Design Systems Inc will take a restructuring charge in the fourth quarter in connection with a plan to improve operational productivity and reduce expenses. Cadence says a charge of about $36m will be necessary in the fourth quarter to cover expenses related to staff reductions, and facilities and program streamlining. The restructuring will include a global workforce reduction of about 12% or, approximately 560 employees. The plan is expected to reduce the company’s cost structure by approximately $8m in the quarter and by roughly $60m in fiscal 1999. The San Jose-based company insists that demand for its products and services is very strong, but that it’s been dissatisfied with cost effectiveness, especially in the services business. The restructuring is intended to improve its services margins and create a more streamlined company. From the outside, Cadence appeared to have been cruising along smoothly despite the worldwide semiconductor slump, having reported third-quarter revenues up 31% to $309m and profits excluding acquisition- related charges that rose 21% to $0.29 per share. The company has maintained a positive bottom line over the past few years, even as others in the industry have regularly slipped deeper into the red.
