Due to what it called a "slowdown" in the alternative payment solutions industry, payment processing company SureFire Commerce will lay off 120 of its employees over the next four months.
Mark Krakower, senior vice president of corporate affairs for SureFire, said the layoffs represent more than 40 percent of the company's workforce and will leave it with 170 employees.
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"Current forecasting indicates that online gaming is a long-term growth industry, but the slowdown has lasted longer than expected."
- Rory Olson
SureFire
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The Montreal-based provider of online payment solutions and e-commerce support has long targeted the online gaming industry. The slowdown in the gaming industry, Krakower said, has forced the company to look at other businesses to make up the loss.
"We continue to look for other sources of revenue outside of online gaming," he said.
The cutbacks will start immediately, he said, and should be completed by July.
Rory Olson, President and CEO of SureFire Commerce, regretted the layoffs and is confident the industry will rebound from its troubled times.
"Current forecasting indicates that online gaming is a long-term growth industry, but the slowdown has lasted longer than expected," he said. "This is a strategic measure. SureFire Commerce has taken action quickly, in order to remain on its trajectory of sustained growth and profitability."
The workforce reduction will decrease the company's salary related expenses by 36 percent.
Olson and Krakower both said SureFire will continue to work diligently to develop new partnerships in and outside of interactive gaming.
SureFire said the effects of the cutbacks, and the continued downturn from online gaming, will affect the company's projected revenues.
Management expects the company will take a restructuring charge in the order of $3 million against its fourth quarter results in addition to a net loss for the fourth quarter of 2001. Revenues ranging from approximately $15 million to $16 million are anticipated for the fourth quarter, vs. $19.6 million in the previous quarter.
In cutting a large part of the payroll, company officials said, SureFire will stay in a strong cash position and will continue to have no debt.
In addition to cutting back its workforce, Krakower said, SureFire will keep an active role in dealing with both gaming industry groups and credit card organizations in working out payment solutions that meet everyone's needs.
"We always work with the credit card companies to do whatever is necessary," he said. "We are in constant contact with them and we have great working relationships with credit card industries."
SureFire said fourth quarter results and annual results for fiscal 2002 will be announced in May of this year.