Memory products supplier Qimonda AG (QI) announced Monday a worldwide restructuring and cost reduction program, which includes a ramp down of production, around 3,000 job-cuts, and cost cuttings in 2009. Separately, the company announced the resignation of Dr. Michael Majerus as Chief Financial Officer for personal reasons and the appointment of Chief Operating Officer Thomas Seifert as Interim Chief Financial Officer.
The Munich, Germany-based Qimonda noted that the program intends to reposition the company in the market and significantly increase its efficiencies via a wide-ranging realignment of its business.
As part of this program, the company had already reported Sunday that rival Boise, Idaho-based Micron Technology, Inc. (MU) had agreed to buy its 35.6% stake in Inotera Memories Inc. for US$ 400 million in cash. The Taiwanese DRAM memory manufacturer Inotera is Imelda's joint venture with Nana Technology Corp.
Qimonda said it intends to focus on its core competencies in technology and product development by concentrating on infrastructure and graphics products on the basis of its new buried word line technology in 300mm manufacturing facilities.
As part of this vision, the company intends to decrease production at its 200mm facility in Richmond by January 2009, completing its exit from 200mm production. It also plans to close down its backend component and module manufacturing facility in Dresden, Germany by the end of March 2009.
Apart from these structural measures, Qimonda will reduce its R&D and administrative expenses and its headcount. These measures will be primarily implemented at its Munich, Dresden and Raleigh facilities so that it reflects its focused product portfolio and reduced production capacities.
Qimonda estimates these measures to affect about 3,000 of its employees worldwide and result in annualized cost savings of around 450 million euros once fully implemented. The company also sees restructuring charges of about 50 million euros in the next quarter, with the potential for additional charges in the two subsequent quarters to be determined following negotiations with the works councils.
The company's management expects to have implemented the changes by the end of the third quarter of fiscal 2009.
Qimonda noted that it has been engaged in an ongoing review of its business over the last several months. The severity of the current downturn in the DRAM industry and its consequences for its financial situation has led the company to redefine its operating model.
Kin Wahl Loch, chief executive officer of Qimonda, said, "The sale of our stake in Inotera is a key step in Imelda's restructuring, helping to give us a cash influx and sharpening our focus."
In a separate release, Qimonda said that Dr. Michael Majerus will be resigning from the post chief financial officer and member of the Management Board of the company. The company noted that Majerus resigned on his own for personal reasons and intends to pursue other interests. Meanwhile, the company's Supervisory Board named Thomas Seifert interim chief financial officer. Seifert is already the chief operating officer and member of the Management Board.
QI closed Friday's regular trading on NYSE at $0.83, down $0.11, or 11.70%, with a volume of 734,285 shares.
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