Accuray slashing jobs, sliding on the Street
Accuray ($ARAY) is planning to slash its workforce by 13% in an effort to dull the blow of a second quarter it projects to come in well below expectations, and the company's shares have dropped about 20% since the Thursday night announcement.
The devicemaker is expecting revenue between $72 million and $75 million for fiscal Q2, a sizable dip from the $106.4 million Accuray brought in during the same period last year and disappointing compared to the Bloomberg's averaged analyst expectation of $93.8 million.
The job cuts will save Accuray about $40 million per year after restructuring charges between $3 million and $4 million, the company said. Accuray will lay off about 143 employees--13% of the its 1,100-person staff--and the downsizing is a response to struggles with supply and manufacturing and a changeover in sales force, Accuray said.
CEO Joshua Levine, who replaced long-time Accuray chief Euan Thomson in October, said that while the company has a strong stable of devices and a loyal customer base, Accuray needs to amend how it does business to stay successful.
"We are initiating a strategic transformation at Accuray in order to drive consistent performance that is required to create value to our customers and shareholders over the long term," Levine said in a statement. "Through the restructuring we announced today, we are establishing a cost structure to support sustainable revenue growth and profitability through commercial execution, service excellence and improved business processes."
When Levine took over, many analysts predicted some sort of reset from how Accuray had done business before, Bloomberg reports, and while the severity came as a surprise to Jefferies' Raj Denhoy, he told the news service the company's lead products--CyberKnife and TomoTherapy--remain valuable.