ARC Announces Consolidation of Software Engineering Teams

10/2/2002 - ARC International, a world leader in semiconductor and software technology licensing, announces that it is to consolidate its software engineering teams to promote synergies in software product development and reduce the overall cost structure of the Group.

ARCís engineering facility in Ottawa will close and it is expected that a portion of the Ottawa-based RTOS and Protocol Software group will be relocated to Santa Cruz, California, where ARCís Software Development team is headquartered. The Elstree operations in the UK and the Nashua, New Hampshire engineering locations will not be affected.

The transition will begin immediately and ARC expects it to be completed by January 2003. As a result of these initiatives and a small number of other redundancies, the Company will take an exceptional charge in the range of £2.4 million, of which approximately £1.4 million will be charged to the cash balance. The charge will cover reduction in the workforce, closure of facilities, disposal of equipment and goodwill write-offs. Overall, the Company expects headcount to decrease by approximately 7%.

The announcement will neither delay the development of new products nor affect the support and service provided for ARCís software customers.

Mike Gulett, CEO of ARC International commented, "We believe that our decision to relocate our software engineers into one facility will improve our ability to provide optimized, integrated SoC IP solutions, will generate significant cost savings, and will move us closer towards our goal of reaching profitability."

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