Following publication of Imation Corp’s poor third quarter results, the company is set to get rid of between 10 and 15% of its work force in an effort to cut costs and return to profitability. The Minnesota Mining & Manufacturing Co Inc spin- off (CI No 2,938) reported a third quarter net loss of $38.7m on revenue down 5% at $529.5m, while nine month losses were $68.5m. The losses include charges related to its acquisition of medical imaging firm Cemax-Icon Inc for $49m (CI No 3,161), but knows it’s going to have to make changes if it is to recover. It is likely that the parts of the business are falling below par will be sold off to aid recovery, although Imation has not yet decided on any specifics. Imation has suffered from the strength of the dollar, a weakening low end storage tape market and a slow down in European business. It admits it made a mistake and didn’t recognise the growth potential of the network market, which has substantially slowed up its low end desktop sales. Between 1,000 and 1,500 of some 10,000 staff across the world will leave the company, with redundancy packages bumping up the restructuring costs, although Imation hopes it will be able to get rid of most of the departing staff through voluntary redundancies. But it expects to see $200m charges that will be accounted for in the fourth quarter, with the restrucuring set for completion by the end of the first quarter of next year.
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