A tough trading environment has seen Swiss accessories manufacturer Logitech move to lay off 300 people as the business moves to restructure their global operation.
Last month, UBS downgraded the US-listed shares of Logitech International to “neutral” from “buy”.
The analyst cited an “incrementally tougher” environment, less visibility, and heightened competition as reasons for the negative sentiment.
Overnight, Logitech management responded with the announcement that “Regrettably, a number of our employees were affected” by the changes, said Nicole Kenyon, a spokeswoman, in an email.
Cost savings will be supportive to earnings growth, but Logitech is operating in a low-barrier-to-entry hardware end market and it is key to have some visibility on top line growth, something we miss right now,” UBS said in its briefing to clients.
The Swiss Company’s move is in line with downsizing efforts across the tech industry claim analysts, with several other CE businesses set to also cut staff numbers in an effort to bring costs under control.
Recently, it was revealed that Logitech’s revenue plummeted 22% from a year earlier in its fiscal 2023 third quarter, to US$1.3 billion.
The company attributed the slump to the broader macroeconomic environment and “lower enterprise and consumer spending,” Chief Executive Officer Bracken Darrell said in the January report. The Company also cut its outlook for the year.
Logitech had 8,200 employees as of March 2022, it said in its latest annual report. In January, the Company hired a new chief financial officer, Charles Boynton.
Not helping Logitech was a fall in demand in the PC and console gaming market.
Year-over-year, Logitech stock is down more than 26 per cent.
“Fiscal Year 2023 has been a year of transition for Logitech as we continue to navigate a series of external headwinds,” Bracken Darrell, Logitech president and chief executive officer said recently.
“While our recent results were disappointing, we have always taken a long-term perspective and our long-term strategies remain unchanged. Short term, we continue to gain market share in our key categories while we adjust our cost structure to the market size. We are encouraged by the opportunities in front of us and as a leader in our markets, we are well positioned to take advantage of the trends that fuel our business – in video, hybrid work, gaming and content creation.”
