ION Networks (Nasdaq: IONN) will cut 36 jobs and take a restructuring charge in the third quarter.
After market close Tuesday, the vendor of network systems said it would take a fiscal third quarter charge of up to $4.5 million to pay for cost-cutting moves. That includes slashing 36 jobs and closing the company's office in Fremont, Calif., a spokesman said.
The measures announced Tuesday will reduce fourth quarter operating expenses by 42 percent year-over-year, the company said. A $500,000 one-time charge will be recorded to pay for severance and other costs related to the workforce reduction. ION also sees a $4 million expense for writedowns.
"As we are addressing operational concerns, we are at the same time seeing early success in reinvigorating our sales," CEO Ron Sacks said. "Now our restructuring plan positions us to move ahead in terms of our cost structure and build on the positive revenue momentum of the second quarter."
Remaining workers have been issued more than 1.72 million options, Sacks said.
The cost-cutting plans come seven weeks after Sacks replaced Stephen Gray, who resigned as CEO following a string of disappointing quarterly reports.>