Rambus Inc. (Nasdaq:RMBS), one of the world's premier technology licensing companies, today announced a restructuring of the company. With this restructuring and related cost saving measures, Rambus expects an overall net cash savings of $30-$35 million annually. The majority of the reduction in expenses are being made in general and administrative (G&A), while the company continues to invest in strategic businesses.
“After reviewing our expenses in detail, we have concluded that the support infrastructure can be reduced to improve profitability,” said Dr. Ronald Black, Rambus chief executive officer. “While we have refined some of our R&D investments, we are preserving all of our strategic initiatives as we believe they will drive significant growth in the future.”
The reductions in expense and associated workforce will begin in the coming weeks and are expected to be completed during the fourth quarter of 2012. As a result of this action, the company will reduce its workforce by approximately 15%. Satish Rishi, Rambus chief financial officer, stated: “We expect to take a charge for severance, on a cash basis, of approximately $6 million over the next two quarters. We are also reviewing our assets, businesses, and other contractual obligations and may take additional charges by the end of the year. Excluding these charges, and including additional investment in strategic initiatives, we expect significant net cash savings of approximately $30-$35 million annually.”
As part of the restructuring, Rambus has created a new organizational structure. The company is now organized into three business units reporting to Dr. Black: (1) Memory and Interfaces, led by Kevin Donnelly; (2) Cryptography Research Inc., led by Paul Kocher; and (3) Lighting and Display Technologies, led by Jeffery Parker. The engineering design teams, Rambus Labs, and other strategic initiatives will be consolidated under Dr. Martin Scott, who will take the new role of chief technology officer. In addition, the company is pleased to introduce Jerome Nadel, who will be joining as chief marketing officer. Also reporting to Dr. Black are: Satish Rishi, chief financial officer; Laura Stark, head of Corporate Strategy; Michael Schroeder, head of human resources; and Thomas Lavelle, general counsel.
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