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Logitech sinks on cuts to jobs and goals
By Andrea Tan |
January 7, 2009, Wednesday
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Print Edition
Print Edition
LOGITECH International SA, the biggest maker of computer mice, withdrew its fiscal 2009 financial targets and said it will cut 15 percent of its non-manufacturing jobs because of the deepening global recession.
Logitech will eliminate 500 positions and may reduce its 5,500 factory jobs, Chairman Guerrino De Luca said in a Bloomberg News interview yesterday. Logitech will take an unspecified one-time charge in the fourth quarter ending March 31, the Switzerland-based company said in a statement.
The shares slumped as much as 13 percent in Swiss trading. Logitech joins Sony Corp, Royal Philips Electronics NV and Motorola Inc in announcing job cuts as the earnings outlook for electronics makers deteriorates. Worldwide spending on information-technology products will shrink 4 percent this year as the global economy contracts, Goldman Sachs Group Inc estimated last month. "The situation is really bad," De Luca said by telephone. "We're on really shaky grounds with the consumer. The situation is really unprecedented."
On October 21, Logitech cut its fiscal 2009 sales and profit forecasts, citing concerns over slowing economic growth. It projected operating income to rise as much as 5 percent on revenue growth of up to 8 percent. The company previously estimated 15 percent expansion in both measures.
Logitech, which also makes speakers for Apple Inc's iPod digital music player, dropped as much as 2.41 Swiss francs to 15.60 francs and traded at 16.88 francs as of 10:19am in Zurich, giving the firm a market value of 3.2 billion francs (US$2.9 billion). The stock tumbled 61 percent in 2008, versus a 35-percent decline in the key Swiss Market Index.
De Luca said he isn't expecting a loss in the fiscal third and fourth quarters. He declined to elaborate. The Swiss company is scheduled to report third-quarter profit on January 20.
Logitech will eliminate 500 positions and may reduce its 5,500 factory jobs, Chairman Guerrino De Luca said in a Bloomberg News interview yesterday. Logitech will take an unspecified one-time charge in the fourth quarter ending March 31, the Switzerland-based company said in a statement.
The shares slumped as much as 13 percent in Swiss trading. Logitech joins Sony Corp, Royal Philips Electronics NV and Motorola Inc in announcing job cuts as the earnings outlook for electronics makers deteriorates. Worldwide spending on information-technology products will shrink 4 percent this year as the global economy contracts, Goldman Sachs Group Inc estimated last month. "The situation is really bad," De Luca said by telephone. "We're on really shaky grounds with the consumer. The situation is really unprecedented."
On October 21, Logitech cut its fiscal 2009 sales and profit forecasts, citing concerns over slowing economic growth. It projected operating income to rise as much as 5 percent on revenue growth of up to 8 percent. The company previously estimated 15 percent expansion in both measures.
Logitech, which also makes speakers for Apple Inc's iPod digital music player, dropped as much as 2.41 Swiss francs to 15.60 francs and traded at 16.88 francs as of 10:19am in Zurich, giving the firm a market value of 3.2 billion francs (US$2.9 billion). The stock tumbled 61 percent in 2008, versus a 35-percent decline in the key Swiss Market Index.
De Luca said he isn't expecting a loss in the fiscal third and fourth quarters. He declined to elaborate. The Swiss company is scheduled to report third-quarter profit on January 20.
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