Would elliott management push for more latoffs?
The stock is down after results,
9 replies (most recent on top)
@dr Hi there. I think you might be misreading the report. The restructuring costs are indeed tied to the layoffs etc. BUT for the first six months of the year (until 30 April 2026) there have been already $234M in "restructing charges" (visible in the report).
The target for FY26 (until 31 October 2026) is a range between $200M-$250M. So with the $5M-$10M expected (not $50M) for Q3 (3 months ending July 31st), this brings us in the $239M-$244M million range already done by the time Q4 kicks in.
So IF we take their original estimate for the full fiscal year at face value, we shouldn't have more than $6M-$11M in restructuring charges in Q4. This is notable but nothing like before. For example in Q1 we had $115M in restructuring costs and Q2 was $119M. So apparently nothing like that, unless they change their estimates.
BUT on the other hand they are writting down (amortizing intangible assets) at an high rate of about $400M per quarter (starting from Q4FY25). So $1600M for FY26 ! For FY25(Q1 through Q3) this number was at $100M as was for full FY24.
And there is still over $28000M of goodwill coming from the Ansys acquisition.
The numbers through Oct 26 has been the same even in Q1 results. So I feel that’s the full year guidance. Based on their full year RIF expenses projection it feels they have used up almost all of it in the first half itself.
One good thing that can come out of this activist investor stepping in is that some heads at the top of the chain might roll. Spicy times ahead. Grab your popcorn.
@e3 The only non RIF actions seems to be facility closure,
If we assume a North Am employee gets 2 months gardening leave and few extra weeks severance (approx 50000 usd)
1000 layoffs would be 100 million.
They’ve been doing layoffs since last sept.
this is going to be outside of the earlier 10%.
Higher mgmt walks away with their golden parachutes , throwing others unders the bus.
@dr Yes. In the report you referred to, it specifies the scope of restructuring costs as follows. So, yes, it is for the upcoming big-time layoffs at the end of FY26. TBH, we should be ZERO surprise about what's coming in the next 2 years. Get yourself a lifeboat when you can, don't wait, and speculate that anything, including your total compensation, will get better in this company. Don't procrastinate with wishful thinking; act today.
Restructuring costs generally include severance and other termination benefits related to voluntary retirement programs, involuntary headcount reductions, and facilities closures. Such restructuring costs include elimination of operational redundancy, permanent reductions in workforce and facilities closures and, therefore, are not considered by us to be a part of the core operation of our business and are not used by management when assessing the core profitability and performance of our business operations.
@dr Probably it will hit the ANSS side hard again; ANSS employees (especially Directors and Managers) at least will get the accelerated RSU vested as part of their severance package during the project June - October/November (FY26 end) timeframe. IDK, but it seems more RSU means significantly more restructuring cost.
FYI. Data is here, search for restructuring charges:
https://investor.synopsys.com/news/news-details/2026/Synopsys-Posts-Financial-Results-for-Second-Quarter-Fiscal-Year-2026/default.aspx
Ive checked the Q2 report on synopsys website,
It shows the expected restructuring cost by July 30 2026 to be 5000 K USD (50 million usd)
And by Oct 2026 to be 200 Mill USD,
Do restructuring costs mostly mean layoffs?
If so thered be significant rifs between July and Oct,
Please correct me if im wrong
@OP It’s the classic - “Buy the rumor, sell the news”
The stock had already risen about 11% since the last earnings report, so much of the optimism was already baked in before results dropped.
In short: the headline numbers were fine, but the IP segment softness + China risk + Ansys integration uncertainty gave investors an excuse to take profits on an already-elevated stock.
@OP of course! That’s the point likely to push for workforce cuts if they believe it will improve profitability and shareholder value. And given there is so much fat and redundancy, there’s little doubt we are far from done. I am sure we will also begin to see changes within SLT. Elliott is about all the hope we have to right the ship.