ARC International has announced a business reorganisation which will divide the company into software and system-on-chip business units.

The St Albans, UK-based company, which develops processor technology in the UK and US,  is also transferring some product development to engineering centres in Russia and India.

“The strategically targeted acquisitions that ARC has successfully executed and integrated, together with continued investment in new lower cost development capabilities, have enabled the company to significantly reposition itself,” said Carl Schlachte, president and CEO.

“The proposed restructuring announced today will enable ARC to more effectively and rapidly deploy these products to high volume consumer markets, reduce our cost base, improve margins, and accelerate our transition to profitability and positive cash flow,” said Schlachte.

The reorganisation plan will take place during the rest of the year. It will lead to a one-time charge of £3m in the second half of 2008, comprising a cash cost of £1.5m and provisions for future costs, principally relating to surplus property lease obligations of a further £1.5m.

Full year savings are expected to be in excess of £2.0 million.  “While a small impact on revenue is expected over the remainder of 2008, fundamental trading conditions remain unchanged,” said the company.