Toronto software firm MedcomSoft Inc. laid off 90 of its staff on Monday as it struggles to reduce its cash burn after posting a steep loss and a drastic drop in revenues last month.
MedcomSoft called the layoffs temporary as it attempts to cut costs "to maintain an adequate operation in all departments, align expenditures to current sale levels and preserve cash," while it seeks new financing or a strategic partnership.
The move affects about 75 per cent of its current staff, leaving it with about 20 employees in Canada and 12 to 15 in the U.S.
The company attributes its hard time to a sluggish market following the Sept. 11 terrorist attacks and longer than expected sale cycles.
Last month the company posted a Q2 loss of $4.37 million, or 19 cents per share, compared with a loss of $2.35 million, or 10 cents per share, a year earlier.
Revenues plunged to just $65,000 during the period from $6.8 million for the same period a year earlier.
Monday's job cuts come on top of ones made over the second quarter as the company reduced its research and development spending on future products in order to focus on sales and marketing of existing offerings. The U.S. sales and marketing staff was increased from 22 to 40 during the period while R& D staff were cut to 38 from 91 through layoffs and attrition.