OpenTV Corp, an interactive TV (iTV) company, is to axe nearly 50% of its workforce, as the economic reality facing the cable and satellite industries finally hits home.
The Mountain View, California-based company is to reduce its headcount by 315 positions, roughly 47% of its workforce, and close eight regional offices as part of its global restructuring plans, which the company hopes will achieve annual savings of $60m and a cash burn reduction of $48m, beginning in the second quarter of 2003.
The company says its plans are part of an effort to significantly reduce expenses and realize efficiencies associated with its recent acquisition of Wink Communications, which it brought for $101m in late September. Wink will continue to operate as a separate subsidiary of OpenTV.
In a statement that will be of small comfort to those affected by yesterdays announcement, the company said We sincerely regret the consequences of this plan on those of our team we must let go, but know that ultimately this difficult decision is in the best interests of our shareholders, remaining employees and customers. We wish the employees affected by this restructuring the best of luck and hope to be of assistance during their transition.
Formed in 1994 as a joint development between Thomson Multimedia and Sun Microsystems in order to produce software solutions for digital television, OpenTV grew via a number of acquisitions over the years, to a dominant position within the iTV software market, alongside Microsoft Corp.