Lake Success, N.Y. — Coby Electronics last Friday reduced its staff by another 17 people, including president Mike Troetti and all sales, marketing and product-management staff except for four salespeople, sources close to Coby told TWICE.
One source said the four remaining salespeople are in charge of closing out inventory to prepare for a complete shutdown later in the year, but COO Sam Oh told TWICE that Coby is “going through a lot of internal discussion” and is “not ready to make any public statement” about the company’s future plans.
The latest layoffs follow an early May layoff of 35 percent of Coby USA’s staff, or a total of 42 people, including Jodi Sally, marketing VP, and Michael Paladino, senior product marketing manager. In all, about five people in sales and marketing were let go at the time, including three regional salespeople, Troetti told TWICE when the initial cuts were made. Those cuts included the closing of the company’s Savannah, Ga., warehouse but not a second warehouse in California.
At the time, Troetti also said a jury ruling against Coby in a contract dispute with Philips “played some role” in the cutbacks. At the end of March, Philips won the suit, which sought more than $20 million in penalties from Coby, but a judge hasn’t yet set the amount of damages, Coby’s Oh told TWICE.
Oh said the ruling “is part of the reason” for the latest staff cuts.
When asked at the time of the first cuts about the potential for a Chapter 11 filing, Troetti said, “At this point, we are leaving everything open.” He said “a lot will depend on the Philips trial.”
In the suit, Philips complained that Coby Electronics breached reseller agreements in which it would pay patent royalties to Philips for DVD players manufactured by Coby China, and distributed in the U.S. by Coby Electronics, in the event that Coby China did not pay the royalties.
Coby Electronics and Coby China are separate entities, and Young Dong Lee is the sole owner of each company, Troetti previously told TWICE.
As part of the May restructuring, Troetti said the company would scale back its selection of legacy categories, consisting of MP3 players, portable DVD players and CD boomboxes. He also said the company would exit the TV business in screen sizes of 46 inches and larger, continue to offer smaller-screen TVs, and concentrate on product categories such as soundbars, Bluetooth speakers and headphones.
Coby Electronics markets its line of value-priced electronics to the U.S., Canada, Latin America and the Caribbean Islands.
