Exar to Cut 12% of Work Force

Exar Corp. said it will fire 12% of its work force, following a quarter in which its profit sank 97% on dwindling sales of its chips. Shares of Exar fell $2 to close at $15 on Nasdaq. The Fremont-based company said it will take a pretax charge of $8 million to $10 million, or 87 cents to $1.08 a share, before taxes, this quarter to fire about 55 employees. Exar has awarded some of its operations to overseas subcontractors to cut costs. The maker of specialized chips said net income in its fiscal third quarter dropped to $103,000, or 1 cent a share, from $3.10 million, or 31 cents, a year ago. Exar also said it settled arbitration with SGS-Thompson Microelectronics Inc., which used to supply wafers for Exar chips. The size of the settlement was not disclosed; Exar said it wouldn’t have a material effect on finances.