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EXHIBIT
99.1
News
Release
TranSwitch
Corporation Announces a Workforce Reduction
And
Other Cost Savings Initiatives
SHELTON, CT – February 1, 2010
- TranSwitch Corporation (NASDAQ: TXCC) a leading provider of semiconductor
solutions for the converging voice, data and video network, today announced that
it recently effected a restructuring to be implemented and concluded during the
first quarter of 2010. This workforce reduction primarily affects personnel
based in Fremont, California, New Delhi and Bangalore, India and Shelton,
Connecticut.
TranSwitch
expects that these restructuring actions and other cost reduction initiatives
will result in annual savings of approximately $4.0 million, and that these
savings will begin to be recognized in first quarter of 2010. Of this amount,
TranSwitch expects annual savings of approximately $2.4 million in reduced
employee related costs including base salary reductions and $1.6 million from
other cost savings initiatives.
In
connection with the restructuring, TranSwitch expects to incur pre-tax
restructuring charges of approximately $1.4 million which will be cash
expenditures primarily for employee related costs. The Company expects these
charges to be recorded in the first quarter of 2010.
“As we
stated in our announcement last December, we are committed to taking the
necessary actions to reduce the Company’s operating expenses to ensure
profitability,” stated Mr. Robert Bosi, Vice President and Chief Financial
Officer of TranSwitch Corporation. “More details will be provided during the
Company’s fourth quarter earnings announcement on February 11,
2010.”
About TranSwitch
Corporation
TranSwitch
Corporation designs, develops and markets innovative semiconductors that provide
core functionality and complete solutions for voice, data and video
communications network equipment. As a leading supplier to telecom,
datacom, cable television and wireless markets, TranSwitch customers include the
major OEMs that serve the worldwide public network, the Internet, and corporate
Wide Area Networks (WANs). TranSwitch devices are inherently
flexible, many incorporating embedded programmable microcontrollers to rapidly
meet customers’ new requirements or evolving network standards by modifying a
function via software instruction. TranSwitch implements global
communications standards in its VLSI solutions and is committed to providing
high-quality products and services. TranSwitch, Shelton, CT, is an ISO 9001
registered company. For more information, visit
www.transwitch.com.
Forward-looking
statements in this release, including statements regarding management's
expectations for future financial results and the markets for TranSwitch's
products, are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that these
forward-looking statements regarding TranSwitch, its operations and its
financial results involve risks and uncertainties, including without limitation
risks associated with acquiring new businesses; of downturns in economic
conditions generally and in the telecommunications and data communications
markets and the semiconductor industry specifically; risks in product
development and market acceptance of and demand for TranSwitch's products and
products developed by TranSwitch's customers; risks relating to TranSwitch's
indebtedness; risks of failing to attract and retain key managerial and
technical personnel; risks associated with foreign sales and high customer
concentration; risks associated with competition and competitive pricing
pressures; risks associated with investing in new businesses; risks of
dependence on third-party VLSI fabrication facilities; risks related to
intellectual property rights and litigation; risks in technology development and
commercialization; and other risks detailed in TranSwitch's filings with the
Securities and Exchange Commission.
For more
information
contact:
Robert
Bosi
Vice
President and Chief Financial Officer
TranSwitch
Corporation
Phone:
203/929-8810 ext.2465
Ted
Chung
Vice
President Business Development
TranSwitch
Corporation
Phone:
203/929-8810 ext.2004