UPDATE 2-Logitech to cut 450 jobs in cost-saving drive

Fri Jun 8, 2012 2:32pm IST

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* To take $35 mln charge; higher-than-expected

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* Shares down 2.8 pct, lag technology sector (Adds analyst comment, share price)

By Katharina Bart and Sakthi Prasad

June 7 (Reuters) - Swiss-listed Logitech International will cut about 13 percent of its workforce, in an attempt by the computer mouse maker's new president for a quick fix following three profit warnings.

Logitech said on Friday the job cuts, mainly white-collar positions, will result in a $35 million charge. They are part of a restructuring, announced in April, to save $80 million amid a soft euro and weak economy.

Shortly before, Logitech hired former Whirlpool executive Bracken Darrell as its president. Darrell is set to replace Chief Executive Guerrino de Luca in January.

Logitech stock fell on Friday, which dealers said was in large part due to investor skepticism that the company could reach its cost-savings targets. At 0858 GMT, Logitech shares were 2.8 percent lower, lagging a 1.2 percent drop in the European technology sector

"Although we appreciate the company's restructuring efforts, much still depends on whether Logitech can return to more healthy growth rates, which in turn rests on its ongoing portfolio refresh," Kepler Research analyst Cyrill Pluess wrote in a note to investors.

Analysts at Bank Vontobel said the restructuring charges are higher than expected, and that job cuts will result in savings immediately, as opposed to other measures to restructure its business.

About $32 million of the charges will be booked against the first quarter of the 2012/13 financial year, which ends on June 30. The company said the job cuts would make up about 60 percent of the $80 million savings the company is seeking.

In January, Logitech cut its outlook for the third time in less than a year, after pledging late last year that the company appeared to have weathered the worst following two earlier profit warnings. (Reporting by Katharina Bart in Zurich and Sakthi Prasad in Bangalore; Editing by Erica Billingham)

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