Novatel Cutting 75 to 80 Employees as Part of RestructuringTuesday, September 10, 2013
Novatel Wireless Inc., a San Diego-based maker of wireless modems and software, said it’s cutting 75 to 80 employees or 17 percent of its total workforce.
The move is part of a restructuring to “refine its business operations and capitalize on synergies in its target markets with the goal of driving long-term profitability,” the company said.
It’s making changes across some of its mobile computing and machine-to-machine business operations that will streamline research and development resources and consolidate several global manufacturing activities, the company said.
Once the restructuring is fully implemented, within 30-45 days, Novatel estimates it will result in annual pre-tax savings of $10 million to $11 million.
CEO Peter Leparulo said the company was seeing an increasing overlap in its mobile computing and M2M segments. “We believe we are at the center of several new growth markets and our aim with this plan is to optimize our operations as we sharpen our focus on those key growth areas,” he said.
As part of the restructuring Novatel said it will record pre-tax charges of $3.2 million to $4.6 million in the second half of 2013, most of which will come in the third quarter.
Last year, Novatel reported a net loss of $89.3 million on revenue of $344 million. That compared to a net loss of $25 million on revenue of $403 million for 2011.
Shares of Novatel (Nasdaq: NVTL) were up a nickel in midday Sept. 9 action, giving it a market capitalization of $103.5 million. The 52 week range is $1.17 to $4.43.
— Mike Allen