Redundancy and a wiser management of labor is what Sierra Wireless has announced as it intends to run down the expenses in a worsening economy. With the new expense reduction program that Sierra Wireless is planning, reducing labor costs by approximately $5.5 million on an annualized run rate basis may be the key ingredient for better business operations.

The program includes the elimination of approximately 56 positions, representing 10% of the company’s workforce. The positions eliminated will impact all levels and functions of the company. These actions are expected to be largely completed during the first quarter of 2009. The company expects to incur a pre-tax charge of approximately $1.3 million in the first quarter for severance and other costs related to this program.

“We have experienced strong revenue growth over the past three years and have significantly expanded our team size. We also believe that our product portfolio and channel position in key markets remains strong. However, based on the expectation that economic uncertainty will continue for the foreseeable future, we felt it was prudent to reduce our cost structure now, in order to mitigate the potential impact of this uncertainty on our business” said Jason Cohenour, President and Chief Executive Officer.

(Source) Press

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