Sonic Foundry Cuts 40 Percent of Workforce
Software and services company Sonic Foundry (www.sonicfoundry.com), announced on Wednesday that it is adjusting its business plan and cutting 40 percent of its workforce across the board. The job cuts bring the employee total to about 245.
Sonic Foundry said it will be affected by the "significant holiday retail weakness" and an "overall softening in the PC industry" in its software business unit. Its services business is also affected because of a "worldwide slowdown in dot-com business activity".
In trading on Thursday, Sonic Foundry's stock is up over 60 percent.
Because of these events, Sonic Foundry says that it will achieve breakeven EBITDA sooner than originally forecasted.
Last week, Sonic Foundry sold its syndication business unit to Carsey-Werner, an independent distributor and syndicator of television programming. Carsey-Werner has been involved in syndicating numerous shows including, "The Cosby Show", "Roseanne", and "3rd Rock from the Sun".
Financial details weren't disclosed however, but Sonic Foundry now has a minority stake in the new Carsey-Werner business unit.
"Our decision to purchase Sonic Foundry's syndication unit will greatly enhance our syndication platform'', said Robert Raleigh, president, Carsey-Werner Domestic Television Distribution. "With the growing demand for substantive streaming content, we see this as a wonderful opportunity to expand our business into the area of new media, which has proven to be a useful business and promotional tool for many who have a need to circulate their content across several mediums. It is also to our benefit to keep Sonic Foundry as a close business partner as we move forward because they offer the services, technology and expertise we need."In August, Sonic Foundry had its first round of job cuts when it closed its office in Santa Monica.
"We ended the previous quarter with signs that the overall technology industry was slowing and began taking cost cutting actions at that time in anticipation of this change," said Rimas Buinevicius, chairman and chief executive officer, in a statement. "It's obvious that after further industry warnings and a continued softening of the economy, additional cost cutting measures are necessary. We will continue to adjust our business plan to these rapidly changing market conditions and will take further actions, if necessary, to position the company to be able to take advantage of business opportunities as they reemerge."
Buinevicius remains optimistic about Sonic Foundry's future. "I remain confident that our technology solutions are among the best in the world and through our announced and further planned actions, we are positioning the company to operate more efficiently in the present market environment," said Buinevicius
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