Business

LED maker Cree lays off 70 employees

Cree’s headquarters in Durham.
Cree’s headquarters in Durham. file photo

LED lighting company Cree Inc. has laid off 70 employees working in its lighting business and in its IT organization, a company spokesperson confirmed.

The layoffs represent about 1 percent of Cree’s total workforce and will impact workers in its Durham and Racine, Wisconsin, offices. Cree employs around 2,600 people in its Durham offices and around 6,000 in total.

“These actions are in response to current business conditions,” a spokesperson said in a statement. “Where possible, the overall impact of this action was reduced by offering alternative positions within the company.”

The company said it had no further information to share.

The layoffs came a couple days after the company announced its quarterly earnings for its fiscal third quarter that ended March 26. Cree’s revenues totaled $342 million in the quarter, down 7 percent from a year ago.

The company’s adjusted net income totaled $749,000, or 1 cent per share, falling from $17 million a year ago. That dropoff was related primarily to charges associated with the termination of the sale of Cree’s Wolfspeed subsidiary.

Wolfspeed’s $850 million sale to German semiconductor maker Infineon was terminated earlier this year after the U.S. government cited national security concerns with the sale.

If not for the termination of the deal, net income would have been $11 million.

Cree’s Wolfspeed business, which makes power components used for solar and battery power and radio frequency products for radar and telecommunication systems, was the only one of the company’s three main business categories to expand during the quarter. Its revenue, which accounts for 16 percent of the company’s total revenue, was $56.1 million, up 29 percent from a year ago.

Lighting products revenue, however, fell 18 percent to $154 million, and LED products revenue fell 3 percent to $131 million. The company said that lighting products revenue was hurt by quality control probems from an outside supplier.

“(Quality control) affected our win rate in the near term for new projects,” Cree Chief Financial Officer Mike McDevitt said during a conference call earlier this week. “Now it’s about building (those win rates) back up.”

The company also announced this week that it has formed a joint venture with a Chinese company to produce lower-cost, mid-power LEDs. Cree will own 51 percent of the new business, Cree Venture LED Company, which it is forming with San’an Optoelectronics, and also will receive royalties for its patent portfolio. The venture will be in Hong Kong.

“For us it’s an opportunity to expand the LED portfolio that our components team is selling and expand the number of customers we can sell to,” Cree CEO Chuck Swoboda said.

Shares of Cree closed down $1.22 per share at $21.88 Friday, down $4.72 since the beginning of the year.

Zachery Eanes: 919-419-6684, @zeanes

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