Kudelski Sets 9% Layoff
Security specialist Kudelski Group plans to lay off about 9 percent of its workforce amid a restructuring aimed at reducing annual costs by 90 million Swiss francs (US$103.08 million) and increasing its focus on Internet TV technologies.
Kudelski, which intends to shed 270 of its 3,000 employees and plans to spin off its Nagra Audio unit early next year, said it expects to realize its cost savings target by the middle of 2012. Kudelski is concentrating headcount reductions, "particularly in high-cost locations," with Switzerland anticipated to account for about one-third of the coming layoffs.
"The objective of the Group is to be able to face the economic crisis impacting several regions where it operates as well as the strengthening of the Swiss franc, and to address the changing needs of the new television and Internet markets," the company said, in the release. Kudelski posted a loss of 3.1 million Swiss francs (US$3.55 million) in the first half of 2011, citing falling exchange rates with the U.S. dollar and Euro.
In related moves, Kudelski will combine OpenTV, a middleware and advanced ad software firm it acquired in 2010, and its conditional access business under a unified Digital TV structure. It will also create a Cybersecurity unit that will focus on third parties falling outside its traditional pay-TV market. (See Kudelski Completes OpenTV Buy.)
Why this matters
The layoff and restructuring offer yet more evidence that specialized vendors are under increasing pressure and that no region is immune to the tough economy.
But Kudelski, which runs the NagraStar LLC joint venture with Dish Network LLC (Nasdaq: DISH), has likewise recognized that the convergence between traditional digital TV and broadband-fed video services is well underway and the company is moving quickly to adapt to this change before it's too late.
Read more about video security as more service providers embrace over-the-top distribution models.
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— Jeff Baumgartner, Site Editor, Light Reading Cable