Wilsonville, Ore. — Video projector maker InFocus said Tuesday it will begin a 12-month restructuring program that will reduce its global workforce approximately 30 percent.
The company said it anticipates fourth-quarter 2008 results to be impacted by slower-than-expected growth in all segments and regions. The workforce reduction is to begin immediately and continue throughout 2009, with the majority of the cuts to be completed in the first half of 2009.
“We’ve made quite difficult, but necessary, decisions resulting from a number of factors affecting our business,” Bob O’Malley, InFocus president and CEO, said in statement announcing the plan. “During September, we began to see a global softening in demand for projectors and experienced increased margin pressure in our markets. October was encouraging, and we entered the fourth quarter with optimism and a fresh inventory of new products in the pipeline, ready for sale. However, the continued economic downturn and reduction in spending have caused us to re-evaluate our strategy as we enter 2009.”
InFocus said it anticipates fourth-quarter 2008 restructuring charges ranging from $5.3 million to $6.1 million. Approximately $1.3 million to $1.6 million of the charge will consist primarily of severance payments, to occur during the fourth quarter of 2008 and over the course of 2009.
The company said its 2009 business model will be built off a breakeven point of $50 million to $55 million revenue per quarter, down 30 percent from previous estimates. The company said it “believes it will achieve profitable operations with an 18 percent gross margin target and operating expenses in the range of $10-11 million per quarter.”
“Our 2009 business model will be based on a targeted and simplified product line combined with prudent management of cash outlays and expense levels. In 2009, we will focus on streamlined sales and marketing programs in our core markets in the education, business and high-end home entertainment markets,” O’Malley said.