KIT Digital To Cut 300 Jobs in Effort to Right Size Operations

Posted by Joe Zaller
Sep 18 2012

KIT Digital has implemented a “significant workforce reduction,” which will result in job losses for approximately 300 employees, or 22% of its current headcount, by the time it is completed.

KIT says these actions will save it approximately $40m on an annualized basis, enabling it to “right size its operation and streamline general corporate functions” while maintaining a high standard of customer service.

The majority of the expense reductions will arise from “non-core areas and general and administrative redundancies.”

This announcement is one of the first public moves by KIT Digital activist investor turned interim CEO Peter Heliand, who took control of the company at the beginning of September, leading to the departure of former CEO Barak Bar-Cohen. Heiland, who was also an activist shareholder in Miranda Technology prior to its sale to Belden, owns approximately 8% of the outstanding shares of KIT digital, primarily through JEC Capital Partners, where he is Managing Director.

“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 Heiland. “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.”

The company said the 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 $4m consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.

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Related Content:

Press Release: KIT digital Restructuring Aligns Expenses With Operations

Former KIT Digital CEO Bar-Cohen Resigns After Activist Investor Takes Control

KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

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Streaming Media.Com Article: What’s Going on with KIT Digital?

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