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Following yesterday's ominous Mad Catz news, comes today's bad news.Mad Catz has laid off 37% of its total work force. Naturally, the higher-ups are calling it a "restructuring plan" for the company. Karen McGinnis, the new President and CEO of Mad Catz issued the following remarks.
The restructuring plan is "focused on lowering operating costs, increasing efficiencies and better aligning its workforce with the needs of the business," Mad Catz said. The plan is expected to be mostly completed by the end of the fourth quarter of fiscal 2016, and should lead to "annual savings in excess of $5.0 million starting in the first quarter of fiscal 2017."
McGinnis continued, "Today, we are announcing a restructuring plan that we strongly believe will enable Mad Catz to be more competitive and increase our focus on operational, technological and commercial actions that will help us achieve our long-term vision. These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering. This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest and create sustainable shareholder value."
McGinnis continued, "Today, we are announcing a restructuring plan that we strongly believe will enable Mad Catz to be more competitive and increase our focus on operational, technological and commercial actions that will help us achieve our long-term vision. These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering. This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest and create sustainable shareholder value."
She also notes that their "quarterly net sales were the second highest in the company's history" but were offset by poor sell-through of Rock Band 4.
(via GI)
This is the kind of thing I'd like to ask Michael Pachter on his Pachter-Factor show. I'm sick of seeing people asking about how Call of Duty is doing, speculations on what the next console will be, or why Nintendo's online practices are so out of date, etc. To me, none of this is relevant to a Financial Analyst. I want to know his thoughts on the survivability of Mad Catz, whether those people buying at such a low price is a wise decision, the competency of Karen McGinnis (if he knows anything about her background and past accomplishments, as I don't), and questions on how long Mad Catz's business was suffering, before us gamers caught wind of it. I know he would only be able to answer a portion of it, but I feel these are questions closer to his field.