PALO ALTO, Calif., Jan. 20, 2006 -- Southwall Technologies Inc., a global manufacturer of thin-film coatings for the electronic display, automotive glass and architectural markets, announced yesterday that it is closing its Palo Alto manufacturing facility, cutting 40 jobs there and transferring its US manufacturing operations to its site near Dresden, Germany, as part of a corporate restructuring effort to reduce costs. According to the company, the worker reduction will affect approximately 40 positions, or 22 percent of Southwall's total worldwide workforce. Severance costs associated with these positions are estimated at about $300,000. After this reduction, Southwall will employ approximately 40 people in nonmanufacturing positions at its site in California, 90 people in Germany and seven in various remote sales offices. As a result of the restructuring actions, Southwall said it expects to reduce its total operating expenses by approximately $4 million a year. The company said it plans to leave its current Palo Alto facility, which also serves as its headquarters and houses its research and development, sales and marketing and administrative offices, and move to another Silicon Valley site. Under the current lease agreement, which expires on Jan. 31, Southwall is obligated to decommission and surrender its manufacturing premises, and the company is currently negotiating these obligations with the landlord. "The continued growth and success of our manufacturing operations in Germany have allowed us to make this change," said Thomas G. Hood, president and CEO. "Southwall has been manufacturing in Palo Alto since the founding of the company over 25 years ago. I believe that we are one of the few remaining manufacturing companies located in this area, and it's a strong testament to our employees that we have succeeded over such a long period of time. I wish them the very best in the future." For more information, visit: www.southwall.com