Geospace Technologies Corp. has announced its programme to reduce its operating costs in light of declining product demand following lower and turbulent crude oil and natural gas prices. This initiative is expected to be substantially completed by the end of the Company’s second fiscal quarter ending 31 March 2016.
The programme is expected to produce approximately US$7 million of annualised cash savings over and above measures already implemented in its first fiscal quarter ended December 31 2015. The majority of savings will be realised through a reduction of over 150 employees from the company’s Houston-area workforce. Additional cost savings will be through a facility consolidation and expense reductions in other areas.
Walter R. Wheeler, President and CEO of Geospace Technologies said: “We are implementing this additional cost reduction program in full respect of current market conditions, where demand for our products has dropped precipitously. This includes the indefinite postponement of a permanent reservoir monitoring project opportunity that was expected to be tendered and delivered during fiscal year 2016. This very difficult decision to reduce our workforce reaches across all departments and geographical locations. However, we believe that we are strategically accomplishing this reduction in a manner that fully maintains our core manufacturing and engineering competencies with little or no interruption to our technical research and development efforts. If market conditions improve, we will appropriately respond to the need for additional resources. Although we currently face an unpredictable outlook with very limited visibility, we have prudently managed our balance sheet with no debt and a high level of liquidity which we believe makes us a survivor through this difficult time. Furthermore, we are experienced in managing our business through such challenging cycles, and we will continue to take the necessary steps to align our operating structure to meet market demand.”
Edited from press release by Angharad Lock
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