Corel Streamlines Operations, Reduces Workforce by 22%
Press release from the issuing company
OTTAWA--Nov. 6, 2002--Corel Corporation today announced that it has reduced its workforce as part of the company's plan to streamline operations and increase efficiencies. This action represents a significant step forward in the company's goal to return to profitability and generate positive cash flow despite the persistently soft economy and weak spending in the IT sector.
Corel has reduced its global workforce by 220 employees or approximately 22 per cent. These changes affect all departments within the organization and will result in a payroll cost reduction of approximately US $12 million per year on an ongoing basis. To implement these workforce changes, the company will incur a one-time restructuring charge of between US$5.8 and US$6.3 million. These expenses will be incurred during the current quarter, enabling the company to realize the cost savings beginning in the first quarter of fiscal 2003.
"Corel has made a commitment to run the business profitably regardless of the prevailing economic conditions and the measures we have implemented today position us to achieve that goal," said Derek Burney, president and CEO of Corel Corporation. "Today's actions are necessary for us to realize the company's ongoing strategy to build long-term value for our shareholders and continually improve the experiences of our customers.
"While we anticipate revenue growth for fiscal 2003, we are adopting a conservative approach in aligning our cost structure to reflect the company's current revenue patterns," added Mr. Burney. "A decision of this kind is never easy. We value all of our employees and their contributions to Corel's success."
"Over the past two years, Corel has shown tremendous progress in its commitment to financial discipline by building a strong balance sheet, substantial cash reserves and eliminating all of its long-term debt," said Randy Eisenbach, chief operating officer at Corel Corporation. "Today's adjustments align Corel's resources more closely with industry best practices and better position the company to introduce new solutions with increased speed and efficiency. By doing this, we can deliver greater value to our customers, partners and shareholders."
The company's global workforce now stands at 769 employees worldwide.
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