OpenTV to Cut Staff In Half14 Oct, 2002 By: Hive News
Interactive television company OpenTV will cut its staff nearly in half in a restructuring plan designed to and improve its position in the contentious cable and satellite markets, the company announced today.
"We sincerely regret the consequences of this plan on those of our team we must let go, but know that ultimately this difficult decision is in the best interests of our shareholders, remaining employees and customers,” said OpenTV CEO James Ackerman. “We wish the employees affected by this restructuring the best of luck and hope to be of assistance during their transition.”
The company expects to reduce its overall headcount by 315 positions, or about 47 percent of its total workforce, and close eight regional offices. Wink will continue to operate as a separate subsidiary of OpenTV and will be part of the company's ongoing strategy, a spokesperson said.
OpenTV anticipates completing the maneuvers by the end of the first quarter of 2003, initially resulting in annualized cost savings and a cash burn reduction of approximately $60 million and $48 million, respectively, beginning in the second quarter of 2003.
The company expects to take a pre-tax restructuring charge of approximately $29 million, of which $20 million will represent cash obligations. This charge is in addition to an estimated pre-tax restructuring charge of $4.1 million associated with the previously announced closure of the company's Naperville, Illinois office, and an estimated restructuring cost of approximately $4 million associated with Wink.
"Given the challenging economic environment and also as a result of some significant changes in business strategies, OpenTV is taking the necessary actions to streamline and right-size the company's operations," said Ackerman. "We believe these cost-cutting measures will result in a more efficient and focused company that will be well positioned to serve our customers and our goal of achieving long-term growth and profitability.”