One of the world's largest manufacturers of discrete semiconductors and passive components today announced that it is implementing restructuring actions aimed at optimizing the company's manufacturing footprint and streamlining business decisions while executing on its Vishay 3.0 growth strategy.
The restructuring will be implemented in phases and will include:
Sales, general and administrative functions will begin to be streamlined immediately until the fourth quarter of 2025, which will result in severance payments to approximately 170 employees (6% of the total sales, general and administrative expenses workforce).
Closure of three manufacturing plants. The diode division's back-end plant in Shanghai, China, is expected to close by the end of 2026, and the production transfer will be completed in phases starting in Q4 2025. In addition, the resistors division's two smaller plants in Fichtelberg, Germany and Milwaukee, Wisconsin, are expected to close in 2026. As a result of the closure of these plants, Vishay will reduce its direct workforce by approximately 365 direct employees, or 2% of its total manufacturing workforce.
Various changes in manufacturing operations and production transfers will result in severance payments to approximately 260 employees.
The Company expects these programs to generate approximately $38 million to $42 million in pre-tax cash charges, primarily related to severance payments, most of which occurred in the third quarter of 2024. Once the program is fully implemented by the end of 2026, Vishay expects to realize at least $23 million in annual cost savings, of which approximately $12 million is expected to be spent on selling, general and administrative expenses. The Company expects to realize immediate annual cost savings of approximately $9 million. Starting in the first quarter of 2025, the company expects to realize annual cost savings of approximately $12 million.
"As we implement Vishay 3.0, reinvent the company and prepare for the next phase of growth, we are constantly looking for opportunities to best foster a business-minded approach to decision-making, further strengthen the customer-first mindset, and improve cost efficiency," said Joel Smejkal, President and CEO of Vishay. With this in mind, we have taken these restructuring measures, in part to remove obstacles to implementation and increase a sense of urgency. We also took the first step toward optimizing our global manufacturing footprint, closing smaller, single-product line factories and moving to a campus manufacturing structure with multiple product lines. Collectively, these measures will help us execute our five-year growth strategy to accelerate revenue growth, expand profitability and improve returns. ”
The Company's estimates of the costs associated with its cost reduction program and expected annual savings represent its current best estimates. However, these estimates are preliminary and subject to change as the Company implements these plans.
Reference Links
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Source | Semiconductor Industry Watch compiled from Vishay
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