US ATM manufacturer Diebold is cutting 800 jobs - five per cent of its global workforce - following a disappointing 2007 and amid gloomy forecasts for the coming year as the credit crisis hits bank branch investment budgets.
The 800 new job cuts are in addition to an ongoing, $100 million cost-reduction programme at Diebold.
The vendor says most of cuts will be made in North America, Brazil and parts of Western Europe. Reductions began in the fourth quarter of 2007 with the elimination of more than 100 jobs.
Diebold is not issuing any financial results as it is being investigated by the regulators over its accounting practices. The vendor expects an ongoing review of accounting items to be completed by the end of the first quarter or in the second quarter. It will then report preliminary results for the final three quarters of 2007.
However, the firm says its estimates for the last two years indicate that its revenue in 2007 was just one per cent higher than in 2006.
The vendor estimates 2007 revenue at $2.95 billion, up just one per cent from estimated revenue of $2.93 billion in 2006. Diebold 2007 revenue was negatively impacted by falling sales at its election system business.
Diebold's financial services revenue is estimated to have increased six per cent to 2.03 billion in 2007, from an estimated £1.93 billion in 2006.
Looking ahead Diebold president and CEO, Thomas Swidarski, says the deteriorating condition of the credit markets within the US bank industry is likely to result in reduced capital investment in branch construction, which will negatively impact Diebold's financial self-service and security businesses in 2008.
"We currently expect that financial self-service and security revenue in the US market will be flat to down five per cent in 2008, with revenue growth in the large, national banks being more than offset by anticipated weakness in the regional bank market," he adds.
Despite the gloomy outlook, Diebold shares were up 4.93% to $27.24 in morning trading in the US.