A little over a month after it lost a major contract, Ottawa’s International Datacasting Corporation (TSX:IDC) says it’s now taking further steps to reduce costs.
The digital content distributor says 30 per cent of its staff, including all executives, will take pay cuts in exchange for equity in the company.
In an effort to increase efficiencies, the company also plans to consolidate its operations so that manufacturing, supply chain and logistics are all located in Ottawa. IDC said it is also planning what it describes as substantial reductions to spending on “external costs such as marketing, consultancy, travel and outsourced services.”
The cuts come as a direct result of the shutdown of IDC’s satellite broadcasting service for Canadian soldiers overseas. In early February, IDC announced that its contract to provide the back end for the Canadian Forces Radio and Television service would be ending in April, when the service is wrapped up, due to technological advances and the declining number of troops overseas.
That contract, which the company has had since 1999, accounted for 17 per cent of revenue during the three-month period that ended Oct. 31, the most recent quarter for which numbers available.
This is the second round of cost-cutting the company has announced this year. In mid-January, before losing the forces contract, IDC announced a similar round of cost-reduction measures.
That move came after revenue fell and the company reported a net loss of over $2 million during its third quarter, which ended on Oct. 31.
In December, the company announced that it had replaced its CFO and was restructuring its sales force.
Even with the steady stream of bad news, the company’s executives say they remain positive.
"IDC experienced an exceptionally challenging year in fiscal 2014,” said Doug Lowther, the company’s president and CEO, in a statement. “The team has responded to these challenges by renewing our strategy, structure, and market positioning.”