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Cadence Design Systems Inc. Message Board

  • vital_statistixx vital_statistixx Oct 4, 2008 12:29 PM Flag

    Big layoffs in Cadence

    Heard from a couple of friends, it seems the numbers are going to be substantial. Magma cuts have been around 10%. Wonder whats going to be the situation for Cadence. EDA is in a tough spot for sure.

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    • With the executive staff gone, CDNS will probably save around $10 million dollars in compensation. Size of the layoff will be reduced! If they let go of a good percentage of next level of VPs, which is a very good possibility, they may be able to save the actual asset of the company (its employee)!

      • 1 Reply to corpfactfinder
      • The important aspect in this critical time is to find a good CEO soon. The market seems to be completely averse to this idea of an "Interim office of the CEO". No matter what Mike did, its' critical that the organization has a proper direction and strategy in place.

        Need of the hour is a clear and focussed approach, strategy of the higher management should be to take quick decisions and clear the decks if they have to. It is still very unclear if they are going to announce this in the Q3 earnings call.

    • Based on the number of resumes on the street the layoff will be closer to 20% maybe higher. Close to 2/3 will be in R&D and the rest the Field. The company is about 50-50 R&D-Field so engineering in North America is being hit the hardest.

      Don't worry, no VP that was ex-Intel is being let go. Most will be getting promotions soon for a job well done.

      • 1 Reply to xedawag
      • When I used to work at Cadence (got layed-off two years ago), I had 5 VPs above me!!! Here was my reporting hierarchy Me->reports to a manager->reports to a director->reports to a VP->reports to another VP->reports to yet another VP->reports to yet another VP->reports to World Wide sales VP->reports to Kevin Bushby-reports to CEO. As you see, this company is a big joke with an engineer reporting to 5 Vice Presidents!!! And speaking of the company size, it had a total of 5300 employees at my time. Glad I am gone from this company.

        Here is a suggestion to Cadence- Fire some of those VPs. They are an unnecessary overhead to the company and this overhead is cutting directly into the shareholders' profits.

        Cadence was a good company to start with. Just too many VPs, useless reporting hierarchy, too many internal politics, useless executive team were the cause of Cadence's financial problems.

    • It depends on drop in revenue going forward. If Mar 08 quarter revenue is becoming a norm, they need to save about $30M per quarter to roughly break even. With operating expenses of roughly $250M per quarter and about 5300 employees, they spend roughly $47K per head. Being more realistic and considering fixed expenses (buildings …), probably cost per head is around $40K per quarter. To save $30M per quarter, they need to let go of 750 or 14% of employees. Of course, this is all based on the assumption that the revenue will drop to Mar 08 quarter level, there is no other way to reduce expenses and they want to break even.

      • 1 Reply to corpfactfinder
      • Good analysis, although I would say they are in the business of wanting to do better than break even - expect a higher number. I was thinking more like 20% ...probably will be somewhere in between. Also expect N.A. to take a disproportionate share as expenses are higher here - more work will move offshore. Cost per head in N.A. is obviously much higher than India.

        It's bad news for employees, but good news for the stock. If it weren't for the current economic situation, the stock would be very appealing at these levels. But the same can be said of many companies now.

 
CDNS
14.875Apr 23 4:00 PMEDT

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