Fingerprint Cards is taking cost reductions measures to adapt to challenging market conditions, including more layoffs and write-offs of inventory.
In announcing the plans, the company said it expects to reduced its workforce by 179 individuals, and that it will execute a non-cash write-off of about SEK 336 million (a little over $38 million USD) in inventory that is no longer worth selling due to “a continued negative price development for capacitive sensors,” the company’s specialty. FPC will also perform a non-cash write-off of about SEK 143 million (about $16.3 million USD) in capitalized R&D projects.
The company says it will undertake these efforts in Q3 of this year, and that it expects them to produce “cost savings of some SEK 350 million on an annual basis with full effect at the end of the fourth quarter of 2018.”
The efforts come after an earlier cost savings program announced at the start of the year that entailed 185 layoffs, which FPC anticipated would result in savings of about SEK 360 million for the year. Ironically, the announcement of these new measures arrives after recent market forecasts predicting continued growth for the fingerprint sensor market, though this growth is premised on emerging applications and technological advances like in-display fingerprint sensors, with the trend of lower ASPs remaining in place for capacitive sensors.
Commenting on FPC’s latest maneuvers in the company’s announcement, CEO Christian Fredrikson cited “the fundamental and rapid change in business conditions” in the mobile capacitive sensor market, adding that the new measures would help FPC to remain competitive and ultimately to return to profitable growth.
June 4, 2018 – by Alex Perala