COLORADO SPRINGS — Ramtron International Corp. laid off 21 people last week as part of a restructuring to free up cash for manufacturing equipment that will be used in an IBM Corp. plant in Vermont to produce new lines of semiconductors.
About 40 percent of the employees laid off, or about eight people, were at Ramtron’s Colorado Springs headquarters, while most of the rest were at a design center the company is closing in Montreal, said Lee Brown, a Ramtron spokesman in the Springs. Ramtron also is cutting salaries by 5 percent to 12 percent, eliminating management performance bonuses and reducing expenses such as travel and advertising, he said.
“This restructuring preserves Ramtron’s financial stability and operational flexibility while we work toward establishing a new foundry with IBM,” said Ramtron Chief Executive Bill Staunton, who earned $408,000 in salary last year and could have matched that in cash bonuses, according to the company’s 2008 proxy statement.
Ramtron last month signed the production agreement with IBM for a new line of chips that incorporate radio-frequency identification technology. The agreement gives Ramtron a third company making its chips and is the only one that does not also hold a license for some of Ramtron’s products. About 90 percent of Ramtron’s chips are produced by Fujitsu Ltd. in Japan with the rest made by Texas Instruments Inc. in Dallas.
To begin production, Ramtron has been trying to borrow up to $16 million through its current lender, Silicon Valley Bank, for equipment. Silicon Valley Bank extended by three months Ramtron’s current $4 million revolving credit line, which would have expired March 27, while talks on the larger financing package continue, Ramtron told stockholders in a Securities and Exchange Commission filing Tuesday.
Ramtron expects to save $5.1 million a year with the restructuring, which will trigger a $4.8 million charge. The charge includes $1 million in severance costs for the 21 employees and the rest for writing off the premium it paid and patents it acquired when it bought Goal Semiconductor for $7.6 million in 2005. The layoff leaves the company with 102 employees in Colorado Springs, a design center in Carlsbad, Calif., and a sales office in Toronto.
Ramtron also is trying to lease unused space in its 69,000-square-foot headquarters in the Northgate business park, the company said in its Feb. 2 annual report to stockholders. Brown said the company uses only about 30 percent of the space in the building. Ramtron told stockholders a year earlier it wanted to sell the building, but Brown said a declining U.S. real estate market makes a sale unlikely “at this time.”
The cuts come as Ramtron stock fell March 9 to 98 cents, the lowest level in the 16 years the stock has been publicly traded. Ramtron shares gained 5 cents Tuesday to $1.05. –
