Multiscreen technology company Synacor said Tuesday that it's laying off approximately 20 percent of its workforce, resulting in the loss of about 70 jobs.
The cuts will leave the struggling Buffalo-based company with about 210 workers.
The reduction comes with Synacor sales declining 13 percent in the first half of 2014 after dropping 8 percent in 2013. Company sales hit a record high of $122 million in 2012. Synacor, which has seen its board battle dissonant shareholder groups in recent months, received more bad news when client Charter Communications (NASDAQ: CHTR) revealed that it would take over the development and maintenance of its Web start page.
The company expects the cuts to save it about $3 million a year in payroll, but cost it $1.2 million in immediate cash in the form of severance and outplacement. That expense will be plied to the third-quarter books.
"These are difficult decisions that, regrettably, affect talented people," said Himesh Bhise, Synacor's new CEO, in a statement. "However, becoming leaner and more agile strengthens Synacor and serves as the foundation for a broader strategic agenda to return the company to growth."
Separately but concurrently, Synacor's board said it tried to "engage in cooperative dialog" with dissonant shareholders JEC Capital and Ratio Capital, which together hold about 10 percent of Synacor stock.
"However, the board's numerous good faith actions were each met with excessive and inappropriate demands by JEC and Ratio, lacking the best interest of all Synacor stockholders, and abruptly JEC and Ratio have abandoned discussions," read a statement issued by the company board.
For more:
- read this Buffalo News story
- read this Multichannel News story
Related links:
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