• Posted by: Technology Staff Editor
• In: Information Technology

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SAN JOSE, Calif. -- The intellectual-property (IP) chip business is facing some tough times.

Following a big layoff at MIPS Technologies Inc. this week, Rambus Inc. said it will reduce its workforce by approximately 90 positions--or about 21 percent of its headcount--and will take a restructuring charge of about $4.0 million in the next two quarters.

The layoff impacts both engineering and non-engineering positions. After the restructuring, which is expected to be completed by the end of the year, Rambus (Los Altos, Calif.) will have a headcount of approximately 340 employees.

With this restructuring and related cost saving measures, Rambus expects cash savings of approximately $17 million annually, principally due to reduced compensation related expenses.

"This is a difficult but appropriate adjustment that will position us to succeed in our strategic objectives," said Harold Hughes, president and chief executive at Rambus, in a statement.

Rambus, which is embroiled in countless suits over memory technology, recently said sales for the second quarter of 2008 were $35.7 million, down 10.1 percent sequentially from the first quarter and down 24.9 percent over the second quarter of last year.

Net loss for the second quarter of 2008 of $144.7 million compares to a net loss of $12.6 million in the first quarter of 2008 and a net loss of $2.7 million in the second quarter of 2007.

Rambus has been involved in at least seven court actions against many of the world's top DRAM makers over the last several years. The company sued several DRAM makers who would not pay royalties for its patents on SDRAMs. The DRAM makers in turn brought actions against Rambus, claiming the company intentionally withheld patented technology from DRAM standards efforts.

The Federal Trade Commission ruled in 2006 that Rambus used anti-competitive practices in obtaining some of its memory patents. But that ruling was overturned in two separate appeals cases earlier this year.

Rambus is a large IP supplier. Another IP vendor, MIPS Technologies, this week announced it will cut 15 percent of its 512 employees following a $103.1 million write off it is taking, mainly against the analog business it recently acquired with Chipidea.