Logitech to cut 500 jobs

Logitech International, the world's biggest maker of computer mice, said Tuesday that it would cut 15 percent of its nonmanufacturing jobs and withdrew its fiscal 2009 profit targets because of the global downturn.

Logitech, which is based in Romanel-sur-Morges, Switzerland, said the weakness in demand was "across all geographies and channels."

Guerrino De Luca, the chairman of Logitech, said it would cut 500 positions and might reduce its 5,500 factory jobs.

"The situation is really bad," De Luca said by telephone. "We're on really shaky grounds with the consumer. The situation is really unprecedented."

Logitech joins such manufacturers as Sony, Philips Electronics and Motorola in announcing job cuts as the earnings outlook deteriorates for electronics makers. Worldwide spending on information-technology products is expected to shrink by 4 percent this year, Goldman Sachs estimated last month.

In October, Logitech reduced its fiscal 2009 sales and profit forecasts, citing concerns over slowing economic growth. On Tuesday, the company said it would take an unspecified one-time charge in the fourth quarter, which ends March 31.

Savings from the job cuts will be reflected from the fiscal first quarter, Logitech said. The company did not provide revised financial targets. Logi-tech has more than 9,000 employees, according to its Web site.

The chief executive, Gerald Quindlen, said in the statement that the economic environment would probably "worsen in the coming months" in what was "likely to be an extended downturn."

Logitech, which also makes speakers, Webcams and keyboards, said that the retail environment deteriorated significantly during the quarter that ended in December and that the economic environment was likely to weaken further in coming months.

"Basically," analysts at Julius Baer said, "the immediate action taken by the management is the right step to counteract the deteriorating environment."

De Luca, the chairman, said Christmas sales had been worse than expected. Quindlen, the chief executive, said customers had cut inventory levels as consumers turned more cautious about spending.

De Luca also said it was a "fair assumption" that revenue and earnings growth in its fiscal year that ends on March 31, 2010, would be nothing like they were in years before the 2009 fiscal year.

Source : International Herald Tribune
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]