Kemet announced a cost savings initiative that involves the reduction of approximately 120 employees in the United States and approximately 250 in Mexico. It also entails further relocation of some processes to China from Mexico and the US. Small numbers of employees in other facilities around the world are also affected, bringing the total reduction to 385 employees. An annualized cost reduction of approximately $16 million will be recognized with a one-time cost of approximately $7 million.

In addition, Kemet has met with the trade unions representing its Italian employees to discuss the company's restructuring plans in Italy. Kemet`s plans include the reduction of 340 employees and the closing of the Vergato factory. Meetings have also occurred with the employees in the Towcester factory to explain intentions to consolidate the Towcester activities into other facilities, which will affect 80 employees. These consolidations are planned to begin in June of this year and will result in an annualized savings of approximately $18 million once fully implemented by the end of fiscal year 2009.