SGI Announces Plans to Restructure European Operations Plan will streamline business and reduce operating expenses in Europe
FREMONT, Calif., March 21, 2012 /PRNewswire/ -- SGI® (NASDAQ: SGI), the trusted leader in technical computing, today announced plans to restructure its European operations to reduce operating expenses in the region. As part of the restructuring plan, SGI plans to reduce approximately 25 percent of the Company's European workforce, close certain legal entities and offices in Europe and realign staff and operations in the region.
The Company expects to incur pre-tax cash charges in the range of $14 million to $17 million, a majority of which will be recognized over the next three fiscal quarters. These charges will primarily consist of employee termination benefits. Upon completion of these restructuring actions, SGI expects to recognize annualized savings of approximately $7.5 million. The Company expects the restructuring to have limited impact on SGI's customers in Europe.
"We believe our restructuring plan is of the right size and scope to navigate a course through the European economic situation with the goal of achieving profitability in that region," said Jorge Titinger, CEO of SGI. "This new organization and structure will put us in a better position to provide all of our customers the world-class levels of solutions and services they deserve and expect while improving our profitability."
"This was a difficult decision for our management team and Board given the significant contributions made by all of our European employees. The actions we are taking are necessary as we look to improve the Company's operational efficiency and profitability going forward. SGI is committed to Europe for the long term and we expect that we will continue to grow our business in the region, continuing to win new customers and building business with existing customers," Titinger concluded.
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