Tessera Technologies Inc will shutter a plant in Tel Aviv and is looking to sell another in North Carolina as it streamlines operations at its unprofitable digital optics business that sells technology used in cellphone cameras.
The DigitalOptics unit, which accounted for a quarter of Tessera's third-quarter revenue, plans to reduce its workforce by up to 40 percent, or about 180 employees. The job cuts do not involve its manufacturing operations in Zhuhai, China.
Tessera has two businesses -- the intellectual property division, which licenses chip-packaging technology, and the digital optics unit.
The company cut 15 percent jobs at the digital optics unit last year, and later said it will close its development facility located in Yokohama, Japan.
Tessera, however, bulked up the business a few months ago, buying some assets in Zhuhai, China from Flextronics International Ltd for $29 million.
DigitalOptics posted an operating loss of $23.3 million in the third quarter.
"Camera module features and functions have increasing importance to consumers in the mobile phone market," Tessera CEO Robert Young said in a statement.
"The changes announced today will focus DigitalOptics on that market and are an important part of driving the business towards profitability."
The company said in October that it would reward Young with stock options that vest only if he completes the spinoff of the DigitalOptics business by March 31, 2015.
The restructuring will be spread over the next two to three quarters and is expected to result in annualized operating expense savings of $15 million to $18 million by the second quarter of 2013, the company said.
Tessera expects to take a related charge of about $4 million to $5 million in the fourth quarter of 2012 and $1 million to $2 million in the first quarter of 2013, excluding tax-related charges associated with sale of the North Carolina facility.
Shares of the company were marginally up at $14.18 in afternoon trade on the Nasdaq on Wednesday.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila)