Vishay Intertechnology Implements Restructuring Actions
24 September 2024 - 1:00PM
Vishay Intertechnology, Inc. (NYSE: VSH), one of the world's
largest manufacturers of discrete semiconductors and passive
components, today announced that it is implementing restructuring
actions designed to optimize the Company’s manufacturing footprint
and streamline business decision making as it executes its Vishay
3.0 growth strategy.
The restructuring actions will be implemented in phases and
include:
- Selling, general, and administrative
functions will be streamlined beginning immediately and through 4Q
2025, resulting in severance payments to approximately 170
employees, or 6% of the SG&A workforce.
- The closure of three manufacturing
facilities. A Diodes segment back-end facility in Shanghai, China
is expected to be closed by the end of 2026 with production
transfers completed in phases beginning 4Q 2025. In addition, two
small facilities in the Resistors segment in Fichtelberg, Germany,
and in Milwaukee, Wisconsin, are expected to be closed in 2026. As
a result of these facility closures, Vishay will reduce its direct
labor by approximately 365 employees, or 2% of its total
manufacturing labor workforce.
- Various changes in manufacturing
operations and production transfers, which will result in severance
payments to approximately 260 employees.
The Company expects to incur pre-tax cash charges of
approximately $38 to $42 million, primarily related to severance
costs, as a result of these programs, mostly in 3Q 2024. Once the
program is fully implemented by the end of 2026, Vishay expects to
realize annualized cost savings of at least $23 million of which
approximately $12 million is expected to be in selling, general and
administration expenses. The Company expects to realize immediate
annualized cost savings of approximately $9 million. Beginning 1Q
2025, the Company expects to realize approximately $12 million in
annualized cost savings.
“As we implement Vishay 3.0, reshaping the Company and preparing
for our next phase of growth, we continuously task ourselves with
identifying opportunities to best foster a business minded approach
to decision making, further enhance our customer first focus and
improve cost efficiencies,” said Joel Smejkal, Vishay's President
and Chief Executive Officer. “With that in mind, we are undertaking
these restructuring actions in part to eliminate barriers to
execution and to intensify the sense of urgency. We’re also taking
our first step to optimize our global manufacturing footprint,
closing smaller single product line facilities and moving toward
campus manufacturing structures with multiple product lines.
Collectively, these actions will help us execute our five-year
growth strategy to accelerate our revenue growth rate, expand
profitability and drive higher returns.”
The Company's estimates of the costs related to its cost
reduction programs and anticipated annual savings represent its
current best estimates. However, such estimates are
preliminary and subject to change as the Company implements these
programs.
About Vishay
Vishay manufactures one of the world’s largest portfolios of
discrete semiconductors and passive electronic components that are
essential to innovative designs in the automotive, industrial,
computing, consumer, telecommunications, military, aerospace, and
medical markets. Serving customers worldwide, Vishay
is The DNA of tech®. Vishay
Intertechnology, Inc. is a Fortune 1,000 Company listed on the NYSE
(VSH). More on Vishay at www.Vishay.com.
Forward-Looking Statements
Statements contained herein that relate to the Company's future
performance and operations, including costs related to its cost
reduction programs, timing of the programs and anticipated annual
savings, and manufacturing structures are forward-looking
statements within the safe harbor provisions of Private Securities
Litigation Reform Act of 1995. Words such as "believe," "estimate,"
"will be," "will," "would," "expect," "anticipate," "plan,"
"project," "intend," "could," "should," or other similar words or
expressions often identify forward-looking statements. Such
statements are based on current expectations only, and are subject
to certain risks, uncertainties and assumptions, many of which are
beyond our control. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results, performance, or achievements may vary
materially from those anticipated, estimated or projected. Among
the factors that could cause actual results to materially differ
include: general business and economic conditions; manufacturing or
supply chain interruptions or changes in customer demand due to
political, economic, and health instability and military conflicts
and hostilities; delays or difficulties in implementing our cost
reduction strategies; delays or difficulties in expanding our
manufacturing capacities; an inability to attract and retain highly
qualified personnel; changes in foreign currency exchange rates;
uncertainty related to the effects of changes in foreign currency
exchange rates; competition and technological changes in our
industries; difficulties in new product development; difficulties
in identifying suitable acquisition candidates, consummating a
transaction on terms which we consider acceptable, and integration
and performance of acquired businesses; changes in U.S. and foreign
trade regulations and tariffs, and uncertainty regarding the same;
changes in applicable domestic and foreign tax regulations, and
uncertainty regarding the same; changes in applicable accounting
standards and other factors affecting our operations that are set
forth in our filings with the Securities and Exchange Commission,
including our annual reports on Form 10-K and our quarterly reports
on Form 10-Q. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
The DNA of tech® is a
registered trademark of Vishay Intertechnology.
Contact:
Vishay Intertechnology, Inc.
Peter Henrici
Executive Vice President, Corporate Development
+1-610-644-1300
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