IPG to eliminate 300 jobs as stock plummets
Photo | Grant Welker
The Oxford headquarters of IPG Photonics
Oxford laser manufacturing IPG Photonics’ stock plummeted 13% Tuesday following a disappointing earnings third quarter report in which the company announced it will lay off 300 people from its global workforce.
The stock losses, down to $124 per share on the Nasdaq stock exchange, continue a turbulent year for the company, which has ridden a roller coaster of declines and minor gains since an April high of $181 per share.
[Related: IPG reports 41% profit decline as trade war continues]
According to the earnings report, IPG has begun a cost-reduction program in response to global competitiveness.
The company expects to reduce operating expenses by $30 million by the end of the fourth quarter. As part of this effort, global headcount will be reduced by 300 positions and a hiring freeze has been put in place. Restructuring costs of $1 million will be incurred by this move with most of those costs coming in the fourth quarter.
[Related: Treasury: IPG CEO Gapontsev not a Russian oligarch]
The company’s revenue of $329 million for the third quarter, marking an 8% year-over-year drop, was on the low side of the expected $325 million to $355 million for the quarter. Earnings per diluted share of $1.07 marked a 42% year-over-year decline for the three months ending in September.
The company’s performance was impacted by subdued demand for industrial automation equipment and the competitive landscape in China, according to IPG. The company plans to focus on its higher margin products moving forward.
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