Emulex Corp., a leader in network connectivity, monitoring and management, has implemented a restructuring plan designed to streamline business operations with the goal of driving long-term shareholder value. This restructuring plan is part of the three-part transformation initiative announced last month to improve profitability, increase cash flow and enhance shareholder value. The restructuring will include a workforce reduction of 110 people or approximately 10 percent, the consolidation of some engineering activities, and the closure of the Company's Bolton, Massachusetts engineering facility. These actions are part of an overall plan to reduce costs in the Company's core business while allowing continued investment in market expansion initiatives and will result in a more streamlined and focused organization.
We are taking these actions to enhance our business model and also deliver on the cost reduction plan that we previously announced. This announcement reinforces our focus toward streamlining our operations with a sense of urgency to deliver increased profitability and cashflow, all with the goal to enhance value to shareholders," said Jeff Benck, President and CEO, Emulex. "Impacting great people is never an easy decision to make but we assessed our long-term needs and consolidating U.S. facilities became a necessity to reach the next level of efficiency. These changes will also allow us to continue to invest in our technology roadmap to ensure our long-term success. We have communicated the impact of these changes to our customers and have verified that we can meet their future needs."
The Company expects to have the restructuring completed and the transition of the Bolton, Massachusetts facility finished by the end of fiscal year 2014 at which time the site will close. This timing is consistent with the cost savings program Emulex announced last month, which is expected to deliver $30 million in annual cost savings in our connectivity business over the fiscal year 2013 spending level, with the full run-rate benefits of the program expected to be realized in fiscal year 2015.
As previously stated, Emulex expects to take a material incremental charge related to the further operating expense reductions in the Company's GAAP results and cash flows for the second quarter of fiscal year 2014. Emulex estimates that it will incur pre-tax GAAP charges in the range of $9 to $10 million in connection with these restructuring actions, the majority of which will be recorded during the second quarter of fiscal year 2014. The restructuring is expected to include between $8 million and $9 million for severance and one-time termination benefits (inclusive of costs associated with the previously announced departure of Jim McCluney), and approximately $1 million for lease termination costs and asset impairments charges. The Company reaffirms its previously announced non-GAAP financial guidance for the second quarter of fiscal year 2014. Emulex will share additional details on its corporate restructuring on next month's earnings call.
Emulex, a leader in network connectivity, monitoring and management, provides hardware and software solutions for global networks that support enterprise, cloud, government and telecommunications. Emulex products enable unrivaled end-to-end application visibility, optimization and acceleration. The Company's I/O connectivity offerings, including its line of ultra high-performance Ethernet and Fibre Channel-based connectivity products, have been designed into server and storage solutions from leading OEMs, including Cisco, Dell, EMC, Fujitsu, Hitachi, HP, Huawei, IBM, NetApp and Oracle, and can be found in the data centers of nearly all of the Fortune 1000. Emulex monitoring and management solutions, including its portfolio of network visibility and recording products, provide organizations with complete network performance management at speeds up to 100Gb Ethernet. Emulex is headquartered in Costa Mesa, Calif.