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Silver Spring Networks (SSNI) Announces Restructuring; Plans Job Cuts

September 16, 2014 6:19 AM EDT
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Price: $16.26 --0%

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On September 16, 2014, Silver Spring Networks (NYSE: SSNI) announced a restructuring plan designed to reduce operating expenses to drive progress towards the Company’s long-term model and to better align the Company’s investments to its growth and key businesses, such as SilverLink, continued global expansion, and its smart city initiatives.

As a result of the restructuring, Silver Spring expects to reduce worldwide headcount and currently estimates that it will incur pre-tax charges of approximately $3.5 to $4.0 million, consisting of severance and other one-time termination benefits, and other associated costs. These charges are expected to be primarily cash-based and paid over the next twelve months. The Company expects to record the majority of the charges in the third quarter of 2014, and expects the majority of the restructuring activities to be completed by the end of 2014 and substantially complete by the second quarter of 2015. The annualized cost savings, net of reinvestment, are estimated to be approximately $2.0 million by the end of 2015. While the cost savings associated with these actions along with other cost savings and productivity initiatives undertaken by the Company were contemplated in the guidance for the third and fourth quarter of 2014 which the Company provided on its August 6, 2014 earnings call, the Company will provide updated guidance on its upcoming third quarter earnings call.



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