CMS Says It Will Lay Off Up to 20% of Force : Employment: The computer company says the cuts will affect workers in Irvine and overseas. Top finance officer also resigns.
CMS Enhancements said Wednesday that it will lay off up to 20% of its 450 employees worldwide in an effort to reduce expenses and more narrowly focus its divergent computer business.
CMS President Jim Farooquee said the company won’t disclose any specific information about the layoffs until Friday, but he confirmed that the job cuts would affect employees in Irvine and overseas. The company employs 370 at its Irvine headquarters, and 80 others around the world, including Australia, Pakistan and Singapore.
Though Farooquee said the final number of layoffs could come close to 20%, he anticipated a somewhat lower figure. “It’s not drastic,” he said.
Mark Matheson, an analyst with the Irvine investment banking firm Cruttenden & Co, said the layoffs were long overdue at the beleaguered firm.
“They’ve been on a bumpy road for two years now. They should have bitten the bullet sooner,” Matheson said. “I feel sorry for the laid-off workers, but I think it’s going to benefit CMS in the long run.”
Matheson estimated the layoffs at between 45 and 90 employees.
CMS also announced Wednesday that its chief financial officer and treasurer would resign Friday to pursue other interests. Frederick Judd, the company’s top finance officer since 1987, will be replaced by auditor Steven G. Holmes and controller William Gibson.
Judd will continue to be employed at CMS as a consultant and company attorney.
CMS decided last year to enter the highly competitive personal computer market to shore up a sagging market for its disk drives, which suffered from industry price wars and bloated inventories.
CMS is hoping it can reverse its bad fortunes by selling custom-made computers for dealers and related companies.
For its fiscal year ended June 30, CMS lost $8.5 million on a 31% plunge in sales, to $130.1 million. The year before, CMS earned $405,195 on sales of $187 million.
CMS stock closed unchanged Wednesday at $3.25 a share in New York Stock Exchange trading.
