Plantronics will close and consolidate several facilities in China. The changes are being made "as part of a strategic initiative to lower costs," said Plantronics in a release.
The affected facilities perform functions for its audio entertainment group (AEG). The group 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.
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 throughout 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," according to the company.
These actions will eventually result in the elimination of all manufacturing operations positions in Dongguan, China, and certain related support functions, said Plantronics. The plan will proceed in phases and is expected to be complete by March 2008.
As a result of the changes, Plantronics said it expects cost savings of approximately $3 million in the 2009 fiscal year and $4 million in the 2010 fiscal year.