Re-focus on Mobile Accessories Causes Layoffs at Logitech

By

In January of this year, Logitech announced what can be considered disappointing earnings for its third quarter 2013 fiscal year. Sales were down by 14 percent with a reported net loss of $195 million. That is when Logitech’s CEO, Bracken Darrell made an important decision. He decided that it was time to focus on making some serious changes to Logitech’s business.

Bracken P. Darrell became Logitech’s CEO on January 1, 2013. He took over for Guerrino De Luca, who now serves as Logitech’s chairman of the board.

The first step that Darrell took was to sell off the Harmony remote business. The second step was to redirect Logitech’s focus toward mobile devices. Darrell said, “The PC market has changed dramatically in the last two years and in my assessment we haven't evolved as quickly as we need to. With that in mind I am now focused on transitioning Logitech to become a faster and more profitable company."

Darrell also said that he would be looking at all areas of Logitech’s business. If things do not improve on the PC side, he said that the company will decisively scale back spending in that area. That was what happened with the Harmony remote business. Sales were down by 24 percent with units declining by 55 percent.

Darrell said that given these figures, the company "does not have the luxury of waiting a few more quarters to see its sales improve. We simply can no longer justify the ongoing investment in this category given the current state of our business and the dynamics of that niche market."

That brings us to today. On March 1, 2013, Darrell announced that Logitech would be laying off 140 people. That is about five percent of its non-direct workforce. Darrell announced an organizational alignment that would closely focus on new strategic priorities. Darrell said, “This alignment to the strategic priorities will save Logitech approximately $16 to $18 million in operating expenses this year alone, but requires a workforce reduction, so you know, ‘layoffs’.”

Logitech was built around support for the PC. Keyboards, mice, trackballs and the QuickCam PC video camera were paramount for Logitech. I myself have had a Logitech wireless keyboard and mouse for as long as they have been making them. However, these are clunky items for the “on the go” generation, so it could be said that the PC is dying. Like a shark constantly moving to stay alive, Logitech is smart enough to re-focus its attention and shift more resources toward the mobile market.

Darrell is quoted as saying, “As we align the organization with our strategy to become a faster, more profitable company, we have also created opportunities to become more focused, improve operational effectiveness and even deliver additional cost savings that will contribute to improved profitability. These actions support our goals to develop outstanding mobility- and PC-related products, streamline our cost structure and achieve faster times to market.”

Due to the slow-moving performance that has been seen on the PC products side, Logitech has turned to working on projects such as the Ultrathin Keyboard Cover for iPad.

Logitech will not stop developing and making PC products, but it will spend more time looking at mobile devices and what products it can produce to make all of your mobile devices more comfortable and easier to use.




Edited by Brooke Neuman

TechZone360 Contributing Writer

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More