Citigroup’s Timothy Arcuri Friday reported that KLA-Tencor (NASDAQ:KLAC) is “likely” to reduce its headcount by about 5%, or 200-250 people, in the second quarter. That would be similar in size to a round of layoffs at the semiconductor equipment company in late 2006. He expects the cuts to be “management heavy and therefore substantial in terms of cost savings.”
With the expected cuts, he says the company will have trimmed 25% of mid-upper level management “as it dramatically thins the organization and improves operational efficiencies.” He says the cuts will save about $35 million to $45 million in operating expenses, or about 20 cents a year in GAAP EPS.
Arcuri continues to rate the stock a Buy, with a $65 price target.
KLA Friday was up 34 cents at $52.35.
KLAC 1-yr chart