SiliconBeat

Marvell Technology said Thursday it’s board has OK’d a plan to get rid of about 850 employees, or 15 percent of the company’s employees, in a move to lower costs “in response to the deteriorating economic environment.”

The job cuts were announced the same day the chip company, based in Bermuda with operations in Santa Clara, released financial results for its 2008 fourth quarter that showed a 39 percent drop in sales and a $65 million loss compared with a $1.3 million gain in the year-before quarter, thanks to a $14.9 million gain from interest the company earned.

The work force reductions are estimated to cost the company roughly $20 million, with $14 million of that related to severance and other employee benefit payments, and $6 million in charges related to facility consolidations. The cost-reduction actions are expected to be implemented by the end of the year.

The company’s last major job reduction came in November 2007, when it said it would let go of about 400 employees, or seven percent of its staff.

At least some of the departing employees may be able to exit owning some shares of the company they can take with them. Two-thirds of Marvell’s employees participated in an offer to exchange underwater options for shares of restricted stock.