I/OMagic Cuts Over 200 Jobs Since Buying Rival

I/OMagic Corp., which sells add-on products for personal computers, said Wednesday it has cut its work force from 300 to fewer than 100 in the 18 months since it acquired Hi-Val Inc., owner of the competing Hi-Val Multimedia products.

I/OMagic, based in Santa Ana, said it has consolidated three facilities, including separate warehouses and technical support centers, into a central operation.

The acquisition also gave I/OMagic the right to a third brand, Digital Research Technology. The company said it plans to continue selling products under all three names.

The over-the-counter stock, which has lost more than 70% of its value over the last year, closed at 59 cents, down 5 cents a share.

I/OMagic lost $6.4 million last year, compared with a profit of $1.8 million in 1999, while sales climbed nearly 66% to $62.8 million. For the first quarter this year, the company posted a loss of $2.1 million as sales fell more than 36% to $10.2 million.

In a statement, I/OMagic chief executive Tony Shahbaz said increased sales have been his top priority. Calling the first half of this year “a difficult transition” because of the layoffs and facilities closures, he predicted “much stronger” financial performance during the second half.

The company’s products include CD-ROM drives, DVD drives, MP3 players, high-speed data, fax and voice modems, sound cards, video graphics accelerators, portable scanners, video conferencing cameras and digital cameras.