Question-and-Answer Session
Operator
Thank you. (Operator instructions) This first question comes from Brian White from Collins Stewart. Your line is open.
Brian White – Collins Stewart
Yes. Good afternoon. When we look at the inventory decline was pretty phenomenal in the quarter. Maybe you can talk through what you did to drive this decrease. Are we going to see further decline at the March quarter?
Mike McNamara
Yes. We’re really, really pleased with the results and all the hard work that went into that. A lot of it was that we actually just pulled out a recessionary playback from 2001. We learned a lot back then about how to drive the inventory out. And I think back in 2001, it took us about four quarters to go figure it out, but there were a lot techniques that we implemented to go make that happen in terms of how we manage our MRP, collaboratively working with the customers to understand what their demand patterns are. And it’s kind of a funny thing, but we actually worked with our customer last quarter to push demand down, which sounds kind of crazy. But we actually continuously challenge what our customers were going to load because I think we were perhaps a little bit more negative than our customers were. And that they don’t want to be left holding with too high inventory level.
So anyways, between working with the customers and actually implementing a lot of the things that we learned over a one year period in 2001 about how to plant safety stocks, how to manage lead times, how to load the MRP system, which just created a very, very good results for us. And do we expect it this quarter? We do. So we’re doing the same thing. We’re pushing it down and I would expect to see continued improvement in terms.
Brian White – Collins Stewart
And when we look at capacity innovation in the December quarter, maybe what you’re looking for in the March quarter. Just also if you had – was there downsizing in the December quarter of headcount and maybe what you expect in the March quarter?
Mike McNamara
Yes. So there was a yes significant downsizing. I think I’ve mentioned it. When we put a pretty flexible base in and we did this, years and years ago and so our ability to thrust down pretty rapidly is high. So there were a very, very significant amount of reductions in the hours worked reflects. So already last quarter we put in PTO, forced PTO, we shutdown factories, we put people on short of work weeks. We had a significant amount of lay offs, which included a lot of temporaries. As mentioned, we reduced the overtime hours very, very substantially. But between all that is we were able to react pretty aggressively. So I would say that all those different items were significant, were very active, were put in really across the board and really in just about any geography.
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