Expects to reduce labor costs annually by approx. $5.5m
Wireless modem company Sierra Wireless has announced plans to cut approximately 56 jobs as part of a cost-reduction program.
The company said the workforce reduction, which will reduce labor costs annually by approximately $5.5m, will impact all levels and functions of the company. It expects a pre-tax charge of approximately $1.3m in the first quarter for severance and other costs.
Last December the company acquired France-based wireless technology provider Wavecom for E218m ($275m) after a hostile takeover bid from smartcard maker Gemalto.
Jason Cohenour, president and chief executive at Sierra Wireless, said: We have experienced strong revenue growth over the past three years and have significantly expanded our team size. We also believe that our product portfolio and channel position in key markets remains strong. However, based on the expectation that economic uncertainty will continue for the foreseeable future, we felt it was prudent to reduce our cost structure now, in order to mitigate the potential impact of this uncertainty on our business.
Last October it reported a 19% decline in net income to $7.3m for the third quarter 2008, compared to net income of $9m in the year-ago quarter, on revenue up 23% at $136.8m.