Inside Secure to cut jobs after “a disappointing performance in 2012”

Up to 20% of the workforce could lose their jobs at the publicly listed NFC, contactless and security chip specialist following the announcement that revenues fell by 19% in 2012 and losses were “impacted by the disappointing performance from the NFC business”.

Inside Secure CEO Remy de Tonnac
DE TONNAC: Staff cuts “a difficult but necessary decision.”

NFC, contactless and security chip specialist Inside Secure, which floated a year ago on the NYSE Euronext Paris exchange, has embarked on a reorganization that could see as many as 20% of its staff lose their jobs.

The news was announced as Inside Secure posted “disappointing” results today for its 2012 financial year, which ended on 31 December. Overall revenues for the year were down 19% to US$122m, with an adjusted operating loss of $30.1m, and Inside Secure says it will not now meet the $400m revenues for 2014 that it forecast during its IPO.

The losses in 2012 were “impacted by the disappointing performance from the NFC business,” the company says.

Inside Secure’s Mobile NFC division saw revenues fall by 10% in 2012 to $43.26m “mainly due to a strong decline in mobile handset sales by Blackberry, the group’s main client, and to the postponement until 2013 of their new generation smartphones.”

“In the fourth quarter 2012, Mobile NFC sales increased 28% sequentially, to $11.6m, supported mainly by the segment’s two major clients (Blackberry and Intel), without however showing signs of sustained recovery on this segment for Inside Secure.”

“Inside Secure recorded a disappointing performance in 2012,” says Rémy de Tonnac, Inside Secure’s CEO. “This bad news, which is mainly due to the great upheavals in the business environment in which we operate and to the difficulties encountered by our main client in the Mobile NFC segment, is leading us to refocus our business and adapt our organization model and our cost structure.

“In this context, we therefore announce today a reorganization project which might lead us to let go some of our colleagues. For me, it is a difficult but necessary decision, which will enable Inside Secure to stabilise financially in order to bounce back. To return to growth, our group must continue to adapt rapidly and to maintain its technological differentiation.”

The “some of our colleagues” referred to by de Tonnac could prove to be a significant number, the announcement says. A cost reduction programme first introduced in the second half of 2012 is now being expanded, it explains, into a reorganization project “which might lead to the potential reduction of around 20% of the global workforce.”

Inside’s stock is trading down 28% at €2.16 in morning trading. Shares were offered at €8.30 when the company floated in February 2012.

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