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The company, which devises advanced semiconductor designs that it licenses to other companies, confirmed on Monday that reductions had been made across all divisions.
The company cut 12 jobs in Ireland, eight in Europe, eight in US and one in Asia. The job reductions, the first ever made by Parthus, leave the company's global workforce at 399.
A spokesman for Parthus said the company had never ruled out job cuts and that the firm had warned the market that it expected reduced business levels going forward. "This is simply an adjustment of resources to take that into account," he said. The company noted in a statement that it has actually increased employees by 80 percent in the past two years and following an internal review was removing "areas of duplication" within the company globally.
The news came after Davy Stockbrokers cut its 2002 revenue forecasts for Parthus some 23 percent. In a research note last week the brokers indicated that there would be no quick recovery for Parthus or the semiconductor industry broadly and said it could be nearly a year before the industry sees a reversal of fortune.
Parthus will release its fourth quarter results at the end of January and has reiterated its guidance on those figures to the market. At the time of its third quarter results in October, Parthus offered a positive outlook for licensing revenue in Q4 and said it expected a "modest" increase in fourth quarter revenue overall. The company also said it would breakeven in mid 2002; the job reductions will be seen as a means for the company to stick to that objective.
Although Parthus has continued to sign a series of deals for the licensing of its semiconductor intellectual property, including major agreements with Motorola and Insignia, the global telecoms slowdown and the delayed roll-out of third generation mobile services has slowed demand for the Parthus product set and dampened royalty payments.
"Things are very difficult in the semiconductor industry -- everybody else has cut jobs and Parthus is not immune," said Paul Phelan, technology analyst with Davy. "They wanted to make their break-even target and in order to make that they needed to make cuts. From an investor's point of view, seven percent of the total jobs is probably marginal."
In the third quarter, ended 30 September, licensing and royalty revenue grew 83 percent year-on-year to USD8.2 million, up 15 percent sequentially from USD7.2 million. The company currently has more than 40 customers worldwide, including six of the top 10 wireless semiconductor companies and has announced more than 20 licensing deals this year.
Phelan said that news of another large licensing deal for Parthus could give the company a boost, but said that what the company really needs is to boost its royalty revenues, which are "almost pure profit." These cannot come until more licensees start shipping hardware containing Parthus designs, however.
Davy has rated Parthus as a hold and Phelan said he was positive on the stock in the long term.
Parthus closed down 0.6 percent in London on Friday.
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