Polycom to cut 6% jobs after posting $2 million net loss

Videoconferencing vendor Polycom is planning to reduce its headcount by approximately 6 percent this quarter. The decision follows Polycom’s dismal performance in Q4 2013 as it reported a net loss of $2 million.

The decision – taken on January 22, 2014 – is targeted at aligning expenses to its revenue and gross margin profile and position the company for improved operating performance.

Polycom said the significant majority of the reductions will take effect in the first quarter of 2014.

“We expect to record charges and make cash expenditures, primarily related to severance and other one-time employee termination benefits, of between $9 million and $11 million through the third quarter of 2014 as a result of this action,” said Polycom.

Peter Leav, Polycom President and Chief Executive Officer

Polycom has approved plans to reduce or eliminate certain leased facilities. As a result, it expects to record between $23 million and $25 million in additional charges upon vacating these facilities in the third quarter of 2014. The total charges expected to be incurred in connection with these actions in the third quarter of 2014 are between $32 million and $36 million.

Polycom has reported 1.4 percent drop in revenue to $347.9 million in the fourth quarter of 2013. It reported a net loss of $2 million in Q4 2013 against a net profit of $1.9 million in Q4 2012.

Revenue contribution from Americas decreased to 49 percent from 50 percent, EMEA 26 percent (26 percent), Asia Pacific 25 percent (24 percent).

The company’s unified communication (UC) group systems contributed 63 percent (67 percent) revenue to Polycom, UC personal devices 18 percent (13 percent) and UC platform 19 percent (19 percent).

“Polycom posted stronger sequential performance in Q4 2013, driven by on-going strength in UC Personal Devices and improvements in EMEA and Asia Pacific,” said Peter Leav, Polycom President and Chief Executive Officer. “In 2014, our goal is to prioritize growth areas within the business and deliver an improved cost structure that will result in better overall profitability for Polycom.”

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