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724 cuts 100 staff as m-commerce downturn bites

23 August 2002  |  3412 views  |  0 Mobile_3

Toronto-based m-commerce outfit 724 Solutions is to cut 100 staff globally as it seeks to reduce operating costs.

The loss-making company says the job cuts, to take effect during the third quarter, will result in annualised cost-savings of $16 million. The company will take a cash restructuring charge of $5-7 million as a result of this action, alongside an unrelated non-cash restructuring charge from the write down of earlier investments of approximately $7 million.

The company, which has been badly hit by a retrenchment in the market for mobile banking solutions, says the job losses will result in a shift in business emphasis, leading to a new focus on delivering software solutions to mobile network operators and in servicing its global install base of financial services clients.

724 recently reported a second quarter net loss of $13.1 million. Of $4.5 million in second quarter revenue, $3.4 million came from the sale of services. The company is re-affirming its guidance for modest revenue growth in the quarter.

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