Logitech To Cut 450 Jobs12:50 PM EST Fri. Jun. 08, 2012
Struggling peripherals maker Logitech will eliminate 450 positions, or about 13 percent of its global workforce, as part of a restructuring expected to trim its annual operating costs by $80 million.
Logitech this week said it expects to take about $35 million in restructuring charges as a result. Bracken Darrell, Logitech's president, described the restructuring as "necessary for our future success."
"As we announced in April, this organizational streamlining, along with our strategy to deliver fewer but more compelling products, should position Logitech for renewed growth and profitability," Darrell said in a statement.
LifeSize, Logitech's videoconferencing-focused division, will not be affected by the planned layoffs, according to a LifeSize spokesperson reached by CRN.
Logitech had a brutal fiscal 2012, a year that included the ouster of CEO Gerald Quindlen and four profit warnings in the span of 12 months. In late April, Logitech reported fiscal fourth-quarter revenue of $532 million, down 3 percent from $548 million a year earlier. Profit, however, reached $28 million, up from $3 million.
All of its major sales categories decreased year-over-year in the quarter, including LifeSize, whose sales shrank 10 percent. But LifeSize, which represents about 6 percent of Logitech's total net sales according to its most recent 10-K filing, increased overall sales by 10 percent in fiscal 2012 compared to 2011.
Overall Logitech 2012 revenue was $2.32 billion, down from $2.36 billion in 2011, with net income of $71 million, down 44 percent from $128 million in 2011.
The company has stayed focused on upgrading product lines, particularly unified communications-related, and has expanded its business channel program. Logitech for Business launched as a separate business unit in April 2011 and, as of this spring, had more than 200 resellers and integrators.
The same week of its earnings announcement, Logitech confirmed a companywide restructuring, including the elimination of two executive management jobs and changes in its reporting structure.
Junien Labrousse, who was executive vice president, products, and president, Logitech Europe, had his position cut and moved to senior vice president, Logitech business group, responsible for PCs, Macs and tablets. Werner Heid, who was senior vice president, worldwide sales and marketing, left Logitech effective May 15.
Both Labrousse and Heid's former groups now report in directly to Darrell. Labrousse took a salary reduction from about $775,000 a year to $680,000 a year and had his bonus target reduced, according to an April 26 8-K report filed by Logitech.