Human Capital

Supervalu Lays Off 85 IT Employees, 50 in MN

The cuts are part of the struggling grocer’s plans to restructure its technology department in an effort to reduce costs and increase efficiency.

Supervalu, Inc., is laying off 85 IT employees nationwide, including about 50 who work at its Eden Prairie headquarters, spokesman Jeff Swanson confirmed Wednesday.

The layoffs are part of the struggling grocer’s plans to restructure its technology department in order to cut costs. The company will also redefine the roles of approximately 300 IT employees to make the department more efficient, Swanson said.

In addition to the 50 laid-off Twin Cities employees, about 20 workers in Idaho and roughly 15 in Utah will lose their jobs. There are also a few open positions that will not be filled, Swanson said. Affected employees were notified during the past week, and they will be laid off within about a month.

In recent months, Supervalu has been closing stores, cutting jobs, selling off some businesses, and lowering its debts in an effort to turn itself around. In June, the company announced plans to cut between 2,200 and 2,500 jobs at its Albertsons supermarkets in California and Nevada. Last month, it said it plans to eliminate 39 marketing positions across the country, and in February, the company announced plans to cut about 800 positions from its corporate and regional offices, including roughly 200 jobs in Minnesota.

Just this week, the company’s board dismissed Craig Herkert—its chief executive for the past three years—and replaced him with Chairman Wayne Sales. Following the announcement on Monday, Swanson told Twin Cities Business that the board decided “this change would be important to the company’s efforts to improve our sales and earnings trajectory and generate long-term shareholder value.”

Meanwhile, Supervalu said last month that it has begun reviewing “strategic alternatives” and is considering a sale. That announcement was made in conjunction with the company’s dismal first-quarter earnings results, which prompted it to suspend its quarterly dividend.

The Eden Prairie-based grocer earned $41 million, or 19 cents per share, for the quarter that ended June 16—a year-over-year drop of about 45 percent and significantly shy of the 38 cents per share that analysts were expecting. Revenue, meanwhile, totaled $10.6 billion, down 4.7 percent from the same period a year ago and less than the $10.8 billion that analysts expected.

Supervalu is among Minnesota’s five largest public companies based on revenue. It has approximately 4,400 stores and employs roughly 130,000. The company reported a net loss of $1 billion on net sales of $36.1 billion in its most recently completed fiscal year.

—Nataleeya Boss
(nboss@tcbmag.com)

Monticello Manufacturer Plans Plant Expansion, Hiring

WSI Industries said that its 47,000-square-foot expansion will accommodate new machinery and new employees.

WSI-HQ-RFW
     WSI's Monticello manufacturing facility

WSI Industries, Inc., said Wednesday that it intends to break ground this month on a major expansion that will double the manufacturing space at its Monticello facility.

The company said that it expects the 47,000-square-foot expansion to be complete in early 2013. It didn’t disclose the cost of the expansion.

WSI is a contract manufacturer of precision parts for a wide range of industries, including aerospace, energy, marine, defense, recreational vehicle, and bioscience. The expansion comes on the heels of positive third-quarter sales that totaled $9.5 million, up 45 percent from the same period a year ago. Earnings for the quarter totaled $598,000, or 21 cents per share, representing a 51 percent jump from the prior year.

The company has also seen consistent annual growth, with revenue totaling $18.8 million in its 2010 fiscal year and $25 million in 2011. It expects to exceed $31 million in sales for the fiscal year that ends August 26.

WSI’s financial strength has led to a steady growth of its work force—and the company foresees additional hiring on the horizon.

President and CEO Benjamin Rashleger told Twin Cities Business on Thursday that the company has steadily added employees over the past several years, growing from 59 employees in 2009 to 91 today.

Rashleger said that, like many other manufacturers, WSI is having a difficult time finding qualified employees, but the company is interested in adding several new workers to meet its current needs.

“I’d hire five to 10 [qualified workers] right now if they walked through the door today,” he said.

As WSI expands its Monticello plant, which is the company’s sole facility, it plans to add new machinery to meet the needs of a growing and diverse client base.

“If we continue the same success in growing our business, we will add new machines, and we will need new people to run them,” Rashleger said.

The expanded facility could accommodate up to roughly 160 employees—meaning that if the company continues its pace of growth, it could eventually boost its headcount by about 70 workers, Rashleger said.

WSI said that it expects the construction of its expanded facility will have a “minimal impact” on its current manufacturing processes.

“This expansion illustrates the confidence we have in our current customers and their future success, as well as our ability to continue to attract and obtain new business in the contract manufacturing market,” Rashleger said in a statement. “We believe the additional space provided by the expansion will provide us the opportunity to also expand the capabilities and services we can offer to our customers, in addition to the added capacity, which will also help to drive the expansion of the business by attracting new customers and programs.”

WSI is among Minnesota’s 100 largest public companies based on its revenue. Shares of the company’s stock were trading up about 3 percent at $6.30 during Thursday morning trading.

—Jake Anderson
(janderson@tcbmag.com)

AFL-CIO Prez. Promises Support for Crystal Sugar Workers

The leader of the AFL-CIO pledged support for the local union that represents workers who were locked out by American Crystal Sugar, saying that the organizations are “escalating their campaign for fairness and justice at the company.”

Richard Trumka, president of the AFL-CIO, on Wednesday pledged support on behalf of his national organization for the 1,300 workers who were locked out by American Crystal Sugar Company more than 11 months ago.

The AFL-CIO, a national organization that encompasses 56 unions representing more than 12 million workers, said in a press release that it is joining forces with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), the local union representing the locked-out workers. The unions are “escalating their campaign for fairness and justice at the company,” the AFL-CIO said.

The AFL-CIO’s press release didn’t specify how exactly the organization would support the workers, and a Thursday morning call to the organization was not immediately returned. But several media reports indicated that Trumka pledged $25,000 to the local union.

Trumka said at a news conference in St. Paul that the AFL-CIO wasn’t ruling out any possible actions in its effort to support the local union, including a boycott, according to a report by the Star Tribune.

Moorhead-based American Crystal Sugar—a farmer-owned co-op and the largest U.S. beet sugar producer—locked out the 1,300 union workers last August after they rejected a new labor contract offer.

The workers have now rejected the company’s contract offers three times, most recently in June.

“Generations of families have worked here to make American Crystal Sugar a profitable and productive producer of sugar,” Trumka said in a statement. “This abysmal display shows total disregard for those employees and the community who have made Crystal Sugar a well-renowned brand and a leader in sugar production in this country.”

American Crystal Vice President Brian Ingulsrud told Minnesota Public Radio (MPR) that the AFL-CIO’s announcement will not cause the company to change its position.

“We are focused on the outstanding employees we currently have in place to process the large crop our shareholders will start delivering to us in a few weeks,” Ingulsrud told MPR.

Earlier this year, Twin Cities Business Editor in Chief Dale Kurschner traveled to the Red River Valley to learn more about the ongoing labor dispute, which involves conflicts over health insurance and seniority issues. To read the resulting feature story, which was published in the February issue of the magazine, click here.

—Jake Anderson
(janderson@tcbmag.com)

Top Supervalu Execs Get Extra Pay, Stock Options to Stay

The supermarket chain’s board of directors has approved issuing non-qualified stock options and retention agreements to CEO Craig Herkert, Chief Financial Officer Sherry Smith, and Executive Vice Presidents Janel Haugarth and Andrew Herring; the options and retention payments vest over time.

A week after struggling Supervalu, Inc., announced that it had begun reviewing “strategic alternatives” and is considering a sale, the Eden Prairie-based company’s board of directors has approved issuing non-qualified stock options and retention agreements to key executives in order to encourage them to stay put.

In a filing with the U.S. Securities and Exchange Commission, the supermarket chain revealed that CEO Craig Herkert, Chief Financial Officer Sherry Smith, and Executive Vice Presidents Janel Haugarth and Andrew Herring have received non-qualified stock options that were given out as part of a “broad-based employee incentive initiative designed to retain and motivate key employees across the company” as it pursues its “business transformation strategy.”

The options have an exercise price of $2.28 per share and vest in three equal installments over the next three years—beginning July 17, 2013, according to the filing. Herkert was awarded 346,875 shares, while Haugarth received 156,250, Smith was given 150,000, and Herring got 125,000. (Haugarth oversees merchandising and logistics at Supervalu, and Herring is in charge of real estate, market development, and legal.)

Meanwhile, Supervalu’s board approved retention agreements for three of the same executives, saying in the filing that they possess skills that are critical to the company as it explores its options. (The board did not strike a retention agreement with Herkert.)

The maximum payments are $750,000 for Smith and Haugarth and $500,000 for Herring. The payments vest over time, and the agreements call for the full sum to be distributed if each executive remains with the company for the next two years. According to the filing, 10 percent of each sum will be paid on January 16, 2013. Another 20 percent will be paid on July 16, 2013, 30 percent on January 16, 2014, and the final 40 percent on July 16, 2014.

Supervalu is working with financial advisors at Goldman Sachs and Greenhill & Company to explore a buyout and review its other options. Citing unnamed “people familiar with the matter,” The Wall Street Journal reported last week that the company was expected to soon begin sending financial information to prospective buyers.

Supervalu isn’t the only Minnesota company that’s paying its executives to stick around. In late June, Richfield-based Best Buy Company, Inc., doled out $2 million in cash, and stock awards valued at roughly $8 million, to four executives. The electronics retailer, which has seen a recent exodus of key leaders and is now searching for a permanent CEO, said in a regulatory filing that the awards are “necessary to enable a stable CEO transition and appropriate continuity of leadership.”

Supervalu’s announcement last week about reviewing strategic alternatives was made in conjunction with the company’s first-quarter sales and earnings results, which were dismal and prompted it to suspend its quarterly dividend. The company earned $41 million, or 19 cents per share, for the quarter that ended June 16—a year-over-year drop of about 45 percent and well shy of the 38 cents per share that analysts polled by Thomson Reuters were expecting. Revenue, meanwhile, totaled $10.6 billion, down 4.7 percent from the same period a year ago and less than the $10.8 billion that analysts expected.

Supervalu is among Minnesota’s five largest public companies based on revenue. It serves customers through a network of approximately 4,400 stores and has about 130,000 employees. The company reported a net loss of $1 billion on net sales of $36.1 billion in its most recently completed fiscal year.

—Christa Meland
(cmeland@tcbmag.com)

Accounting Firm McGladrey Moves HQ from Mpls. to Chicago

The move will not result in any job reductions in the Twin Cities, and the firm intends to hire between 300 and 500 new employees in Chicago.

Accounting and consulting firm McGladrey, LLP, has moved its corporate headquarters from Minneapolis to Chicago.

The headquarters transition is effective immediately, McGladrey spokeswoman Terri Andrews said in a Thursday phone interview.

The move will not result in any job cuts in the Twin Cities, where the firm actually intends to boost its employee count during the coming year, Andrews said.

There will be no transfer of employees or changes to the company’s local operations, Andrews said. The tangible change is that the company will legally be headquartered in Chicago, and it will denote the new headquarters in marketing and legal materials.

Several factors contributed to the company’s decision to move its headquarters, according to Andrews. First, Chicago is home to the firm’s largest office, where it employs roughly 1,000. The firm’s international services business is also headquartered there.

The company’s leadership team is scattered throughout the country; for example, Chief Financial Officer Doug Opheim will remain in Minnesota following the headquarters transition.

But Managing Partner and CEO Joe Adams, as well as some other high-ranking executives, were already based in Chicago, making it a prime headquarters location, Andrews said.

In a press release issued by Chicago Mayor Rahm Emanuel, McGladrey said it intends to hire between 300 and 500 new employees in Chicago during the next five years “to meet the increasing needs of the firm’s Chicago-based clients and to support the firm’s corporate operations.”

The firm did not receive any economic incentives from the city or Illinois to encourage the move, according to Andrews.

Adams said in a statement that Chicago is “a global business hub” that “provides an outstanding climate to fuel McGladrey’s future growth domestically and abroad.”

“McGladrey is uniquely focused on serving middle-market businesses, which are the backbone of the global economy, and Chicago is a central location that provides convenient access to our many U.S. offices, our clients, and the global locations where they operate,” Adams added.

McGladrey is Minnesota’s second-largest accounting firm based on certified public accountants in the state, of whom there are 243. The firm employs a total of about 650 in Minnesota, including 500 in Minneapolis.

The remaining 150 Minnesota employees work out of offices in Duluth, Rochester, and Bloomington—although the Bloomington office will soon be closed, and employees there will be relocated to the firm’s Minneapolis office. That consolidation is unrelated to the headquarters move and was announced to affected employees earlier this year, Andrews said.

Nationwide, McGladrey operates 75 U.S. offices and employs about 6,500. The firm bills itself as the nation’s fifth-largest provider of assurance, tax, and consulting services, and its headquarters move makes it the largest certified public accounting firm based in Chicago.

—Jake Anderson
(janderson@tcbmag.com)

After Cutting 600, Best Buy Hires 500 for Geek Squad

The company is reportedly retooling its Geek Squad team as it shifts employees away from basic home installations to focus on services for small businesses and on providing technology expertise at Best Buy’s smaller, “connected”-format stores.

Best Buy Company, Inc., which recently announced plans to cut about 600 Geek Squad workers, reportedly intends to hire roughly 500 new Geek Squad employees by the end of this year.

Less than two weeks ago, Best Buy said that it would eliminate 2,400 jobs companywide in its latest move to cut costs and turn the company around. In addition to the 600 Geek Squad cuts, the layoffs include roughly 1,800 Best Buy store employees.

The Geek Squad reduction targeted technicians who exclusively serviced individual products, like televisions and personal computers, Best Buy Senior Vice President of Services George Sherman told the Star Tribune. Now, the Richfield-based electronics retailer is hiring higher-skilled workers, as it shifts more Geek Squad employees away from basic home installations to focus on services for small businesses, the Minneapolis newspaper reported.

The move seems to align with statements interim CEO G. Mike Mikan made last month at Best Buy’s annual meeting. He said the company would refocus on improving customer experience and “strengthening technology expertise.” Mikan also said that the company “cannot be seen just as a hardware retailer.”

Best Buy previously took other steps to focus on small businesses. Late last year it announced plans to acquire MindShift Technologies—a Massachusetts-based managed service provider for small and mid-sized businesses—for $167 million.

And in March, Best Buy unveiled the Geek Squad Partner Program, through which the company works with vendors, including telecom and cable resellers, that serve small businesses.

Best Buy is also boosting the number of Geek Squad employees at its stores that feature the smaller, “connected-store” layout, the Star Tribune reported.

To read more about Best Buy’s plans to hire 500 new Geek Squad employees, read the full Star Tribune story here.

To learn more about the company’s restructuring efforts—as well as other developments, including an exodus of key leaders and the founder’s potential attempt at taking the company private—click here.

—Jake Anderson
(janderson@tcbmag.com)

Supervalu Shares Dive as Co. Weighs Sale, Suspends Dividend

Supervalu’s stock price plummeted as the company announced poor first-quarter results and said it has hired financial advisors to help it review “strategic alternatives.”

Struggling grocery retailer Supervalu, Inc.—which has been closing stores, cutting jobs, selling off some businesses, and lowering its debts in a major turnaround effort—on Wednesday announced dismal first-quarter results and said it is angling for a buyer.

In addition, the Eden Prairie-based company is suspending its quarterly dividend, as well as its same-store sales and earnings guidance, and embarking on another round of significant cost cutting.

Supervalu tapped financial advisors at Goldman Sachs and Greenhill & Company for “a review of strategic alternatives,” which typically indicates that a company is exploring a sale.

The company said, however: “There can be no assurance that such a review will result in any transaction or any change in the company’s overall structure or its business model.”

CEO Craig Herkert said in an e-mail to employees that the review will include the possible sale of all or parts of the company. He told investors, meanwhile, that bankruptcy is not among the alternatives being considered.

While Supervalu explores a possible sale, it plans to accelerate its restructuring plans by slashing costs by an additional $250 million over the next two years. (The company had previously planned $75 million in cost reductions for this fiscal year.)

Supervalu will also aggressively lower its prices—a move designed to regain market share from Walmart, Target, and other competitors.

“We intend to do this while remaining profitable, continuing to pay down debt, and investing the capital to maintain and enhance our stores and related assets,” Herkert said in a statement. “Accordingly, we will be pursuing deeper and more structural cost-savings initiatives. Also, we are adopting more flexible financing facilities, reducing our near-term capital expenditures, and suspending our dividend.”

Supervalu spokesman Mike Siemienas said Thursday that the company has paid dividends since 1936.

Herkert acknowledged that Supervalu’s operating profit margin may be negatively affected in the near- and mid-term by the price reductions at stores, but the company expects the move to result in “improved longer-term performance and market share growth.”

Supervalu, which reportedly has been saddled with major debt since its $12 billion acquisition of Albertsons in 2006, said it will reduce its debt by $450 million to $500 million during this fiscal year and pay down at least $400 million annually going forward. The company also aims to reduce capital expenditures by $175 million to $225 million this year.

Supervalu, which operates supermarkets under a variety of brands, including Cub Foods in the Twin Cities, announced its updated restructuring plans in conjunction with a dismal first-quarter earnings report.

The company earned $41 million, or 19 cents per share, for the quarter that ended June 16—a year-over-year drop of about 45 percent and well shy of the 38 cents per share that analysts polled by Thomson Reuters were expecting.

Revenue totaled $10.6 billion, down 4.7 percent from the same period a year ago and less than the $10.8 billion that analysts expected.

Supervalu’s stock plummeted following the company’s announcement, trading down nearly 44 percent at $2.97 Thursday morning.

Some analysts have speculated that Supervalu’s low stock price makes it a cheap leveraged buyout target, but a Wednesday report by The Wall Street Journal indicated that the company may have difficulty finding a buyer, as private-equity firms look for companies that can improve through obvious cost-cutting measures or other quick fixes.

Supervalu’s Wednesday announcement is the latest of many cost-cutting efforts. In February, the company announced plans to cut about 800 positions from its corporate and regional offices, including roughly 200 jobs in Minnesota. In June, it said it would cut between 2,200 and 2,500 jobs at its Albertsons supermarkets in California and Nevada. And last week, the company said it plans to eliminate 39 marketing positions across the country.

Supervalu is among Minnesota’s five largest public companies based on revenue. It serves customers through a network of approximately 4,400 stores and has about 130,000 employees. The company reported a net loss of $1 billion on net sales of $36.1 billion in its most recently completed fiscal year.

—Jake Anderson
(janderson@tcbmag.com)

90 Applicants Vying for $47.5M in State Grants

Some high-profile projects—like the proposed St. Paul Saints ballpark and the Southwest Corridor light-rail line—previously announced plans to seek a share of the state funding, but 90 applications have now been filed.

The deadline for applying for $47.5 million in state funding has passed—and the large applicant pool indicates that competition is stiff.

A $496 million bonding bill that Governor Mark Dayton signed last month included $47.5 million for unspecified economic development projects in Minnesota. The Minnesota Department of Employment and Economic Development (DEED), which is charged with doling out the funding, began accepting grant applications in May, and the initial June deadline was subsequently extended to July 9.

DEED spokesman Monte Hanson told Twin Cities Business on Tuesday morning that 90 applications were submitted, and the agency will now begin its process of selecting grant recipients.

Download the full list of applicants here.

The state will consider a variety of factors for each project before selecting recipients, including job creation or retention (including permanent and temporary construction jobs), whether a project will increase the local tax base, and general return on investment. Selected projects must provide matching dollars for any state funding they receive.

Individuals involved with a few major projects previously publicized their intention to apply for funding. St. Paul is seeking $27 million to help fund a new $54 million stadium for the St. Paul Saints minor league baseball team. The city council approved St. Paul’s plan to pursue the funding, and Mayor Chris Coleman’s office announced Monday that the city had formally applied.

“This ballpark won’t just be an attraction for families across the region, it’s going to create jobs and add vitality to our community,” Coleman said in a statement. “I’m looking forward to putting people to work as soon as we receive the funding from DEED. This is a very exciting day for St. Paul.”

It’s been clear for some time, however, that St. Paul faces competition from other major projects that were left out of the bonding bill. For example, the Metropolitan Council is seeking state funding for the proposed Southwest Corridor light-rail line, which would run between downtown Minneapolis and Eden Prairie. The Pioneer Press recently reported that the Met Council requested $14 million for the project. And there have also been funding requests for expansions of the civic centers in Rochester and Mankato.

It's now clear that those applicants represent only a small fraction of the pool of projects vying for funding, and the applicants are collectively requesting $288.4 million—far more money than is available.

"We were impressed by the volume and quality of the projects submitted for capital project grants," DEED Commissioner Mark Phillips said in a statement. "In the next several weeks, we will evaluate the applications closely and make a decision on which projects are selected. It's going to take time, given the huge response to the program."

—Jake Anderson
(janderson@tcbmag.com)

Best Buy Cuts 2,400 More Jobs in Turnaround Effort

The cuts, which include roughly 600 Geek Squad positions, are in addition to 400 corporate layoffs announced in March.

Richfield-based Best Buy Company, Inc., is eliminating 2,400 jobs companywide in its latest move to cut costs and turn the company around.

The cuts are related to a major restructuring plan outlined in March, but they are in addition to the 400 corporate job cuts announced at that time, Best Buy spokesman Bruce Hight told Twin Cities Business on Monday.

The 2,400 jobs include about 600 Geek Squad positions and roughly 1,800 Best Buy store employees, Hight said. The positions will be eliminated by August 1.

The company did not disclose how many of the layoffs will occur in Minnesota or the Twin Cities. Best Buy employs about 167,000 people globally, so the latest round of cuts represents about 1.4 percent of its work force. Affected employees are eligible for severance and job placement assistance, Hight said.

When the company announced plans to cut 400 jobs in March—and to close 50 big-box stores this year—it said those actions would result in $800 million in savings during the next three years. Hight didn’t disclose how much Best Buy expects to save from the latest 2,400 job cuts.

“These changes were previously announced as part of the leadership team’s ongoing turnaround plan,” Hight said in a prepared statement. “We are working to minimize the impact of the changes on employees while building the foundation for a strong future.”

Best Buy, which has been hurt by competition from Internet retailers like Amazon, experienced a 5.3 percent decline in same-store sales during its most recent fiscal quarter. Central to its restructuring plan is the shift away from big-box stores to a smaller, “connected store” format.

Last month, during the company’s annual meeting, interim CEO G. Mike Mikan told shareholders that Best Buy’s aim is to become “more relevant, more intelligent, and more nimble.” He said the company cannot be seen merely as a hardware retailer and must strengthen its technology expertise and improve customer experience.

Given those statements, some analysts were puzzled by Best Buy’s decision to eliminate Geek Squad positions, according to a report by the Star Tribune. The company is “cutting its best and brightest people at a time when the company is fighting for its future,” Burt Flickinger III, managing director of Strategic Resource Group consulting group in New York, told the Minneapolis newspaper.

The Pioneer Press, however, reported that the Geek Squad downsizing “appears to be mostly focused on repair positions, with fewer cuts to service operations.”

As Best Buy implements its restructuring plan, it has also experienced significant changes to its leadership team. The company saw an exodus of many key leaders this year, including Geek Squad founder Robert Stephens, and it recently doled out bonuses worth $10 million in an effort to retain its remaining key executives.

The company is still searching for a new chief executive to replace Brian Dunn, who stepped down in April amid an investigation that found that he violated company policy by engaging in a close personal relationship with a female employee.

The investigation also found that Chairman and founder Richard Schulze “acted inappropriately” when he failed to notify the company’s audit committee after learning about allegations of such a relationship. Schulze abruptly resigned from Best Buy’s board last month and began exploring options for his roughly 20 percent stake in the company. Shares of Best Buy’s stock jumped last Monday on speculation that Schulze may be close to making a buyout offer for the company, but a Reuters report indicated that such an offer is still a ways off, stifling the market’s momentum.

Best Buy’s stock price slid about 0.7 percent on Friday as news of the 2,400 layoffs surfaced. Shares were trading down about 2.8 percent at $20.99 mid-day Monday.

Best Buy is Minnesota’s third-largest public company based on revenue, which totaled $50.7 billion for the fiscal year that ended on March 3.

—Jake Anderson
(janderson@tcbmag.com)

Xata Lays Off 29 as It Moves to Mobile Devices

The job cuts come at a time when Xata—which provides fleet-management software for trucking companies—is moving away from onboard systems and toward the use of mobile devices.

Xata Corporation has laid off 29 employees as part of a shift in its business model.

The Eden Prairie-based software company helps trucking companies keep track of their fleets—and it is in the process of moving away from onboard fleet-management systems and toward the use of mobile devices.

It announced the job cuts in a Tuesday filing with the U.S. Securities and Exchange Commission. As of September 30, Xata employed 210—so the cuts affected almost 14 percent of the company’s workers.

Xata said that it expects to take an $800,000 restructuring charge for the quarter that ended June 30 in order “to better align our work force with our mobile-based strategy.” However, going forward, it predicts annual costs savings of $2.8 million.

The company will also record charges of between $1.3 million and $1.6 million in order to write off obsolete inventory. Additionally, management concluded that a $3.4 million impairment charge was necessary, Xata said.

Xata made headlines recently when Chief Financial Officer Scott Christian abruptly resigned, effective June 22, after about a year on the job.

For the fiscal year that ended in September, publicly traded Xata reported a net loss of $2.8 million on $63 million in revenue. For the second quarter that ended in March, the company reported a $2.1 million net loss on revenue totaling $15.9 million.

—Christa Meland
(cmeland@tcbmag.com)