Logitech steps up job cuts
Strong dollar, weak retail sales
Mouse and peripherals maker Logitech is cutting more jobs in reaction to the deepening recession.
The Swiss firm said in early January it was withdrawing financial guidance for the year and cutting headcount.
The firm will now cut up to 600 jobs, rather than the 525 earlier predicted.
Sales for the third quarter of fiscal 2009 were down 16 per cent to $627m and operating profit was down a whopping 63 per cent to $43m. Gross margins were down to 29.9 per cent versus 36.9 per cent in the same period of 2008, thanks to the strong dollar and retail promotions.
Gerald Quindlen, Logitech's CEO and president, said: “All indications point to an even weaker retail environment in the coming months. Consequently, our plans assume that in Q4 we will see year-over-year declines in sales, operating income before restructuring charges and gross margin that are similar to or worse than the year-over-year declines we experienced in Q3."
But the firm expects positive cash flow by focussing on costs. It hopes to cut annual costs by $50m by 2010.
OEM sales were down 11 per cent, US sales fell 21 per cent and Emea sales 19 per cent. Only Asia was positive, with growth of eight per cent.
Full statement here. ®