Corel Corp. (Nasdaq: CORL) said Wednesday it has identified how it will shave off previously announced cuts of $40 million, and realign the company's costs with its expected achievable revenue.
As part of this plan, engineering operations, based in Dublin, Ireland, will be moved to corporate headquarters in Ottawa, Canada. Manufacturing for international distribution will continue to be outsourced in Ireland.
Shares in the company closed up 0.09 to 3.84 Tuesday, well off their 52-week high of 44.5, though the stock has improved since the departure of flamboyant CEO Michael Cowpland.
In a conference call, the company said the total cost of the restructuring was expected to be $1.4 million.
Under the restructuring plan, Corel expects to reduce expenditures by $40 million on an annualized basis. The cost reductions are being implemented across all departments, including $18 million in salaries, benefits and third-party contract expenditures; $12 million in advertising, marketing and market development costs; $5 million in cost of sales and product-related expenses and $5 million in other general and administrative costs.
A total of 139 positions at Corel's Dublin facility will be "affected," according to the press release. On the conference call, the company said these jobs would be cut, but employees would have a chance to reapply for jobs in Ottawa.
When Corel announced its disappointing second-quarter results, Cowpland had said cuts in "a lot of discretionary areas" will help Corel post a profit in its fourth quarter. He said those cuts would not include more layoffs.
"I'm not Mike," said Derek J. Burney, interim president and CEO in response to a flood of questions about the company reneging on its word to guarantee employment. He denied accusations he had made the same guarantee in his first week on the job.
The company said it will make two more announcements on progress in other key areas by the end of the month. It had no projection on profitability.
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