Xilinx to slash 7% of its workforce citing revenue headwinds

Xilinx said its wired and wireless business drove down results in the quarter.
Written by Natalie Gagliordi, Contributor

Xilinx delivered mixed third quarter financial results after the bell on Tuesday and revealed that it plans to lay off 7% of its workers because of revenue headwinds.

The chipmaker reported third quarter net income of $162 million, or 64 cents per share. Non-GAAP earnings were 68 cents per share on revenue of $723 million, down 13% year over year.

Analysts were expecting non-GAAP earnings of 59 cents per share on revenue of $730.6 million. Shares of Xilinx were down over 8% after hours.

Xilinx said its wired and wireless business declined 29% and drove down results in the quarter. Revenue from its datacenter group fell 16%. The weaknesses prompted the company to slash its workforce and slow its hiring to replace attrition. Xilinx said it plans to further reduce discretionary spending and that it's targeting additional operating efficiencies across the business.

The company expects to measures to generate up to $20 million in operating expense savings.

"As expected, our fiscal third quarter was a challenging quarter and our revenue came in near the midpoint of our guidance. Given the revenue headwinds we experienced during the quarter, we took actions to reduce our operating expenses which delivered earnings greater than our expectations," said Xilinx CEO Victor Peng. "These are difficult actions, but we believe the decisive steps we are taking to reset our operating expenses will allow us to drive our growth strategy and technology roadmap while enabling a more appropriate level of operating profitability." 

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