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I.G.T. TO CUT COSTS
Wednesday March 26,2014 : I.G.T. TO CUT COSTS
Company realigns strategy to ensure long-term earnings growth.
Online and land gambling supplier International Game Technology is taking action to re-align its cost structure for long-term earnings growth, the company said in a statement Tuesday.
The initiative will see staff retrenchments and cost cutting, with one of several key goals being the re-engineering of the firm's game development process to leverage its strength in online social gaming to improve land-based game performance.
Cost-cutting measures include the reduction of IGT's global workforce by 7 percent to realise expected cost savings of $30 million in the current fiscal year and an estimated $50 million on an annual run-rate basis.
The company is lowering its fiscal year 2014 guidance for adjusted earnings per share from continuing operations, and has also provided guidance for adjusted earnings per share from continuing operations for the second fiscal quarter of 2014.
CEO Patti Hart commented: "As we reach the halfway point in our fiscal year, you can see this is a challenging time for the industry and IGT. We knew that our success in 2013 would be difficult to replicate.
“However, we did not expect such a sharp decline in North American gross gaming revenues, or further degradation in the international currency, compliance, and importation environment."
The company has left untouched its annual $200 million Research and Development budget, and has indicated that it is going to increase its commitment to the Asian market.
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