Primix Solutions Restructures, Lays Off 13 Percent Of Workforce
June 26, 2001 6:53 PM ET
Primix Solutions last week lowered second-quarter earnings expectations and announced a layoff of 13 percent of its staff, or 36 employees.
Primix, based here, is just one of a growing list of e-services companies making hard business decisions based on economic uncertainties and shifts in market demand, says Michael Troiano, Primix president.
The lowered earnings and need to restructure are directly related to the macroeconomic environment, particularly in the United States, Troiano says.
Three of the Primix's larger U.S. projects were unexpectedly halted or delayed beyond the second quarter due to client concerns about the economy. Despite several new pieces of business, Primix determined it would not be able to back-fill the $2 million those lost deals represented during the quarter, he says.
Primix said last Friday it expects revenue in the range of $6 million to $6.5 million for second-quarter 2001 and a loss, before charges, of between $1.4 million and $1.9 million.
The restructuring impacts both corporate and regional employees and establishes one Northeast operation that will function as an autonomous unit, almost like a parent company, Troiano says.
The company's sales department remains intact, while some billable employees in the creative and technology departments were let go, he adds.
After reducing quarterly run-rate expenses by about $1 million per quarter, corporate and other overhead will be of a size appropriate to the company's near-term revenue potential, says Troiano.
"This is where we are. It's a hard thing, but we did what needed to be done," he says. "Today we came into work and we're making money."
The company also announced the closing of a $3.5 million credit facility from Silicon Valley Bank, secured against receivables and other assets. In addition, the company is nearing completion of a $2.5 million facility to be provided by CEO Lennart Mengwall and is seeking funds from additional external sources.
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