Image Entertainment Acts to Combat Its Losses

Image Entertainment Inc., a struggling Chatsworth-based distributor of movies and other programs on laserdisc, said Monday it pared its work force by 17% and is taking other cost-cutting steps that will result in a loss of about $9 million for its fiscal year ending March 31.

Image, which lost $3.2 million on sales of $43.3 million for the nine months ended Dec. 31, said it laid off 16 people--including three executives--to shrink its work force to 78 from 94. The company also plans to reduce its inventory of laserdisc titles to improve its cash flow and reduce its long-term debt.

Collectively, the actions should reduce Image’s annual costs by more than $4.5 million, but will also require a $5-million restructuring charge that will contribute to the $9-million loss for the year, the company said.

Image, whose biggest stockholder is billionaire John Kluge, named its general counsel Cheryl Lee to the additional post of chief administrative officer. Jeff Framer was named chief financial officer, replacing Jerome M. Smolar.

David Borshell was named senior vice president for operations, and Rick Linton was appointed senior vice president for sales and marketing. They replaced former executive vice president Lee H. Kasper and former senior vice president Wendy Moss.

Martin W. Greenwald, Image’s chairman and chief executive, said in an interview that “we needed to go on a diet” in terms of costs because of the loss of certain contracts last year. That lost business is now being replaced, but Image had to cut its overhead costs in the meantime, he said.

“We don’t see a softening in the market at all” in terms of consumer demand for laserdiscs, Greenwald added.