KIT digital Restructuring Aligns Expenses With Operations
The restructuring will further enhance efficiencies and focus expertise in the company's principal areas of operation. The majority of the expense reductions will arise from non-core areas and general and administrative redundancies. The award winning company will continue to invest in its core competencies: KIT Cosmos video content management system (VCMS) software, supported by Managed Services and Professional Services; and the KIT Cloud web-based video-asset management system.
"By accelerating the integration of the company, we will be able to enhance our product offerings, improve time-to-market efficiency, and bring the business to a place of financial strength," said Peter Heiland, KIT digital's interim Chief Executive Officer. "While we have completed some non-core divestures and reduced the non essential support infrastructure, we are preserving all of the strategic initiatives surrounding our core competencies as we believe they will drive significant growth."
Upon completion of the reductions being announced today, one substantial component of the entire program, the company's restructuring program, which was first announced in May 2012, will have achieved a net reduction in workforce of approximately 300 employees, or 22% of its total headcount. The associated savings from employee related expenses will be approximately $40 million on an annualized basis. This total excludes additional savings from divestitures, which occurred during the second quarter of 2012. Fabrice Hamaide, KIT digital's Chief Financial Officer, stated, "As we move forward we remain confident in our strategy, competitiveness, and our ability to create value for shareholders."
The company's actions pursuant to this restructuring plan will take place primarily during the third quarter of 2012 and will be completed by the end of calendar year 2012. The company currently estimates that it will record a restructuring expense in the third quarter of 2012 of approximately $4.0 million consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.
Source: KIT digital
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