Plantronics Inc. on November 28 announced that its board of directors and executive management approved a plan to close and/or consolidate a number of facilities that perform functions for its Audio Entertainment Group (AEG) as part of a strategic initiative to lower costs. AEG designs, makes and sells computer and home entertainment sound systems, and a line of headphones and microphones for personal digital media under the Altec Lansing and inMotion brands.
Specifically, Plantronics plans to close AEG's manufacturing facility in Dongguan, China; shut down a related Hong Kong research and development, sales and procurement office; and consolidate procurement, research and development activities for AEG in a new Shenzhen, China site. The selling, general and administrative functions of AEG will also be consolidated with those of Plantronics Audio Communication Group through-out the Asia-Pacific region. These steps are part of a strategic initiative designed to reduce fixed costs by outsourcing AEG manufacturing to the network of qualified contract manufacturers it already has in place.
These actions will eventually result in the elimination of all manufacturing operations positions in Dongguan, China and certain related support functions. The plan will proceed in phases and is expected to be complete by March 2008. As a result, we currently expect cost savings of approximately $3 million in fiscal year 2009 and $4 million in fiscal year 2010.
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