By Lisa Johnston
New products on display at the American International Toy Fair, held in N
MORGES, SWITZERLAND — Logitech International announced an organizational realignment that will eliminate 5 percent of its workforce and net the company up to $18 million in incremental savings for the next fiscal year, according to the company’s 8K filing.
The company anticipates recording a pretax cash charge of between $12 million and $14 million in the fourth quarter of the current fiscal year. The charge is related primarily to the personnel reductions, with the company eliminating approximately 140 positions from its worldwide labor workforce.
The moves were made to align the company with strategic priorities outlined by newly appointed CEO Bracken Darrell last month, after Logitech posted a third-quarter loss and announced that it would get out of the remote control and video security businesses. Those priorities include an increasing focus on mobility products, improving profitability in PCrelated products and enhancing global operational efficiencies.
Logitech will discontinue speaker docks and console gaming peripherals by the end of the year. According to Darrell, it will focus on tablet accessories instead. Its Ultrathin keyboard cover was again its No. 1 selling product in its last reporting quarter, and the company’s tablet accessory sales have nearly doubled in the Americas.
The newly targeted savings are in addition to the previously announced $80 million savings in annual operating costs for the next fiscal year related to the company’s April 2012 restructuring.
“These actions support our goals to develop outstanding mobility- and PC-related products, streamline our cost structure and achieve faster times to market. As we align the organization with our strategy to become a faster, more profitable company, we have also created opportunities to become more focused, improve operational effectiveness and even deliver additional cost savings that will contribute to improved profitability,” commented Darrell.
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