Cognex Cutting Costs by $15M
Machine vision sensors and systems maker Cognex Corp. announced Tuesday that it will trim executive pay, eliminate 85 employees and contractors, and institute mandatory shutdown days in an effort to cut expenses by $15 million a year amid the dismal global business environment.
Cognex said it also would cancel most current open positions, reduce its leased office space, reduce company contributions to the 401(k) plan, and decrease discretionary spending, actions that would result in a pretax charge of approximately $4 million in the second quarter of 2009.
“In late 2008, it became clear to us that the slumping global economy would negatively impact our business. Based on that, we reduced our expenses in anticipation of lower revenue in 2009,” said Dr. Robert J. Shillman, Cognex chairman and CEO, of the measures it took in November – cutting 60 positions and closing its Georgia distribution facility. “Unfortunately, conditions have deteriorated beyond what we had anticipated last fall, and because we currently see no sign of improvement in the near term, we are taking the additional steps announced today to more closely align our costs with the decreased level of demand for our products,” he said.
It is unlikely that the cost cuts will be enough to guarantee the company’s profitability for 2009, Shillman said.
“Although profitability is very important to us, the deeper cuts that would have been required to achieve it would have required delaying or even eliminating programs that we believe are crucial to the long-term success of our company. Thankfully, because of our past profitable history and our conservative financial management, we have built a strong balance sheet with a large cash reserve that we have been saving for a rainy day ... and, unfortunately, that day has come,” he said.
For more information, visit: www.cognex.com
/Buyers_Guide/Cognex_Corp/c2695