Merge cutting work force by 30 percent
Merge Technologies Inc. of West Allis is planning to reduce its work force by about 30 percent by the end of September as part of an initiative to slash $10 million to $12 million in expenses.
Merge, a provider of medical imaging software and technology with about 600 employees, said most of those job cuts would occur through the layoff of about 160 workers by March 31, with most effective immediately.
About 45 of those layoffs would occur in the United States and Canada, while 115 would occur offshore, said Merge, which does business as Merge Healthcare and has its headquarters at 6737 West Washington St. An office in Burlington, Mass., has been vacated.
Another 20 employees are expected to leave the company through attrition by the end of September, reducing total employment to 420.
The company will recognize a charge in its first quarter ending March 31 of approximately $2 million related to the layoffs. The layoff will save approximately $7 million a year.
Merge said it has already cut enough jobs since Sept. 30, 2007, to save another $3 million. Further attrition in employment is expected to save $1 million to $2 million a year.
In recent months, the troubled Merge has undertaken two restatements of its financial statements to clear up accounting issues and is the target of a probe by the U.S. Securities and Exchange Commission stemming from the restatements. Merge is also defending itself against several class-action lawsuits filed in 2006.
In addition, companies in the medical imaging industry, including Merge and imaging equipment maker GE Healthcare Technologies in Waukesha, have been hurt by the passage of the federal Deficit Reduction Act of 2005, which reduced Medicare reimbursement for medical imaging procedures.
Ken Rardin, the company's president and CEO, said: "As we addressed earlier, the impacts of the Deficit Reduction Act, the two financial statement restatements, and ongoing legal expenses associated with litigation and the SEC investigation have been quite significant and have necessitated the recent rightsizing initiative."
Merge, a provider of medical imaging software and technology with about 600 employees, said most of those job cuts would occur through the layoff of about 160 workers by March 31, with most effective immediately.
About 45 of those layoffs would occur in the United States and Canada, while 115 would occur offshore, said Merge, which does business as Merge Healthcare and has its headquarters at 6737 West Washington St. An office in Burlington, Mass., has been vacated.
Another 20 employees are expected to leave the company through attrition by the end of September, reducing total employment to 420.
The company will recognize a charge in its first quarter ending March 31 of approximately $2 million related to the layoffs. The layoff will save approximately $7 million a year.
Merge said it has already cut enough jobs since Sept. 30, 2007, to save another $3 million. Further attrition in employment is expected to save $1 million to $2 million a year.
In recent months, the troubled Merge has undertaken two restatements of its financial statements to clear up accounting issues and is the target of a probe by the U.S. Securities and Exchange Commission stemming from the restatements. Merge is also defending itself against several class-action lawsuits filed in 2006.
In addition, companies in the medical imaging industry, including Merge and imaging equipment maker GE Healthcare Technologies in Waukesha, have been hurt by the passage of the federal Deficit Reduction Act of 2005, which reduced Medicare reimbursement for medical imaging procedures.
Ken Rardin, the company's president and CEO, said: "As we addressed earlier, the impacts of the Deficit Reduction Act, the two financial statement restatements, and ongoing legal expenses associated with litigation and the SEC investigation have been quite significant and have necessitated the recent rightsizing initiative."
Labels: layoffs, Merge Technologies, Wisconsin
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