12 May Synchronoss cuts 10% of workforce | Light Reading
Synchronoss announced it cut 10% of its workforce, including its CMO Mary Clark, in order to reduce expenses. The company said the action was only partly related to the COVID-19 pandemic, and was designed to better position the company to obtain firmer financial footing.
“As we evaluate the expenses, we recognized we need to be a leaner organization going forward to drive business more efficiently and increase the speed of execution in 2020 and beyond, a reduction in management layers to flatten the organization was required,” CEO Glenn Lurie explained during the company’s quarterly conference call with analysts this week, according to a Seeking Alpha transcript of his remarks.
Synchronoss primarily sells white-label cloud and digital services to network operators, like cloud storage and messaging offerings. It is also working to expand into other areas such as the Internet of Things (IoT) with a smart building service, for example.
Lurie explained that Synchronoss has seen “little indication” of a slowdown in its business related to the coronavirus, and that the company’s quarterly financial results were largely within its expectations. Synchronoss reported revenues of $77.1 million, down roughly 12.5% from the same quarter a year ago, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.8 million, down 73.5% from the year-ago quarter.
But Lurie said Synchronoss is working to strengthen its financial position through a number of initiatives including a 15% reduction to executives’ base salary and a 20% reduction to Lurie’s salary, as well as a freeze on merit increases and new hires.
“We are also taking advantage of government sponsored COVID-19 relief programs globally to the extent that we qualify,” he added.
Lurie said he consolidated much of Synchronoss’ sales and marketing under COO Jeff Miller, resulting in the May 1 departure of CMO Mary Clark, who Lurie hired in 2018.
“As a result, we are confident in our EBITDA goals for the year and believe they are achievable,” Lurie explained of the actions. He said the company expects to save roughly $45 million in 2020 due to its cost-cutting efforts.
During his call with analysts, Lurie touted some of Synchronoss’ recent progress. He said the company launched its cloud products with AT&T and America Movil’s TracFone, and continues to make progress on its CCMI joint venture with AT&T, Sprint, T-Mobile and Verizon for the launch of Rich Communications Services (RCS) messaging. He said that RCS launch will happen sometime in 2020.