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Rocky ride ahead for IGT with layoffs on the cards
International Game Technology (IGT) is understood to have offered buyouts to around 500 of its older employees across the company, almost ten percent of the workforce, as the first step in a programme of cost reduction.
A sharp decline in the company's share price, falling profits and the resignation of its chief operating officer Steve W. Morrow is driving cost-cutting exercises. Year-on-year third quarter profits fell by 21 percent, while the share price halved, prompting action.
Thomas J Matthews, who is taking Morrow's place at the head of the company as part of a major restructuring exercise, emailed staff while he was still chief executive and president outlining plans for layoffs which are expected to take place in early January. A voluntary separation programme has been offered to staff in all departments, and final decisions about layoffs are to be taken in November, once the impact of this scheme is clear.
"My hope is that through these efforts, we can stabilize our spending to be aligned with our revenue forecasts and be in a position to weather the near-term uncertainty that is prevalent in our industry and our economy in general," Matthews said.
Analysts point out that IGT enjoyed a boom in sales and profits as TITO was introduced, but sales slowed while costs remained static. The company has invested heavily in server-based gaming technology which has yet to contribute to company profits.
