Toronto-based m-commerce outfit 724 Solutions is to cut 100 staff globally as it seeks to reduce operating costs.
The loss-making company says the job cuts, to take effect during the third quarter, will result in annualised cost-savings of $16 million. The company will take a cash restructuring charge of $5-7 million as a result of this action, alongside an unrelated non-cash restructuring charge from the write down of earlier investments of approximately $7 million.
The company, which has been badly hit by a retrenchment in the market for mobile banking solutions, says the job losses will result in a shift in business emphasis, leading to a new focus on delivering software solutions to mobile network operators and in servicing its global install base of financial services clients.
724 recently reported a second quarter net loss of $13.1 million. Of $4.5 million in second quarter revenue, $3.4 million came from the sale of services. The company is re-affirming its guidance for modest revenue growth in the quarter.