Wolfspeed (WOLF) is reducing its headcount, to accelerate its path to generate positive free cash flow

Wolfspeed (NYSE: WOLF) disclosed:

On January 29, 2025, Wolfspeed, Inc. (the “Company”) outlined three priorities. First, the Company will seek to improve the financial performance of the Company and accelerate its path to generate positive free cash flow. Second, the Company plans to take aggressive steps to strengthen its balance sheet. And third, the Company plans to continue its efforts to raise cost-effective capital required to support its long-term growth plan. The Company is providing an update on these and other efforts in this report.
•Reducing Cost and Lowering CapEx:
◦Reducing headcount by approximately 180 employees, primarily in materials operations, at both the Durham and Siler City locations
◦Targeting estimated FY2026 capital expenditures of approximately $150 million to $200 million
◦Targeting estimated FY2027 capital expenditures of approximately $30 million to $50 million
•Improving Operating Financial Performance:
◦Upon completion of the operational simplifications, additional restructuring actions, including the closure of North Carolina Fab and other cost reduction initiatives, the Company is targeting:
▪Adjusted EBITDA break-even point at $800 million revenue on an annualized basis
▪Positive unlevered operating cash flow in FY2026 of approximately $200 million, based on targeted FY2026 revenue growth
◦Upon a successful completion of its debt refinancing efforts and operational restructuring actions, the Company is targeting to have positive levered free cash flow during FY2027 and sufficient cash and liquidity to execute on its revised operating plan, excluding any federal grant funding and additional funds from the secured lending facility announced on October 15, 2024
The Company is also reconfirming the business outlook for the third quarter of FY2025 discussed in its January 29, 2025 press release and continues to work on potentially securing federal grant funding and accelerating payment of 48D cash tax refunds.
The information in this Item 7.01 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Furthermore, the information in this Item 7.01 shall not be deemed incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

Item 8.01 Other Events.

On March 6, 2025, the Company announced that it is reducing its headcount by approximately 180 employees, primarily in material operations, at both the Durham and Siler City locations. In addition, in the third quarter of FY2025, the Company expects to take a one-time charge relating to a litigation settlement. Finally, the Company announced that it has received its conditional Certificate of Occupancy for the Siler City Materials Facility.

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