From today's press release:
"The company is instituting an
incremental approximately $100 million cost reduction program for fiscal 2025. These savings would mitigate the impact of a range of potential
scenarios for a reduction in revenue and related operating income from the company’s Greater China business. The cost reduction program
includes optimizing stock-based compensation and non-labor spending and accelerating certain productivity measures."
...
Optimizing stock based compensation = AEG cuts
Non-labor spending = restricted travel and conferences
Does anyone have an idea what 'accelerating certain productivity measures' means? Employee monitoring software? RTO? Another Teams\Confluence migration?
8 replies (most recent on top)
Part of in increasing productivity is moving indirect positions to India. They can hire 3 people in India for cost of 1 employee in SD. They moved IT to India a year or so ago. The buyers in SD were all laid off and their jobs moved to India. They are in process of moving planning and inventory analysts etc to India as well. So if you aren’t in a job where you are hands on…for sure run don’t walk out of Illumina.
What I’ve seen them do is they lay off somebody and then give that person’s job to someone else who already has a full-time job. So basically you’re now doing the job that used to be done by two or three people. I know people who are given the job responsibilities of someone who was laid off. So they are now doing job that 2 or 3 people used to do. To make things worse they’re not giving big increases in salary, promotions, reducing benefits, and now they’re messing with restricted stock units.
RTO is being used to lose people by attrition. If you need to relocate from San Diego, they will show you the door.
"The cost reduction program includes optimizing stock-based compensation and non-labor spending and accelerating certain productivity measures."
Read legally "includes" in this context does not preclude doing RIFs, or anything else.
It will mean more RIFs, particularly in R&D
Close china all together
All of this will not drive double digit growth for the shareholders. Would not be surprised if someone tries to purchase ILMN in the next year.
Other productivity measures will not include employee monitoring software. It might increase the drive for RTO, but that requires more cost for facilities, desks, computer equipment, and site services. In a heavy cost-cutting situation, RTO works against the main objective. My guess is that they’re referring to getting more aggressive with automating and further outsourcing - and likely more so the latter, as the former requires more upfront investment (which they might be inclined to do now if they can capitalize the cost and spread it out over time via depreciation).