International Datacasting Corporation issued a “significant” number of temporary layoffs Tuesday as its board begins to explore strategic alternatives for the beleaguered company.
“It’s been a tough day today,” CFO and interim CEO Steve Archambault said. “The message to our employees is really short-term pain for long-term gain. We are not terminating them. We are putting them on temporary leave.
“I don’t want to quote an exact number, but call it very significant head count reduction.”
IDC’s head count is now less than 20, he said. According to OBJ's Ottawa Technology magazine, the firm's head count in February 2014 was 65.
The move comes the same day the board accepted the resignations of co-CEOs Chris Barrett and Steeve Huin. Mr. Archambault will also resign on April 29. He said the resignations will make the company more attractive to potential suitors because there will be no issue with costly executive severance packages.
It also makes IDC more attractive for a "tuck-in acquisition," he said, where the buyer would be interested in buying only IDC’s core product lines and hiring the employees supporting these product lines. In this situation, there would be no need for a management team other than helping with the transition.
The moves came hours after the broadcast technology provider announced it had failed to close certain key deals by its fiscal 2016 fourth quarter, leading to much lower revenues and a much higher net loss than was expected.
Mr. Archambault said the delays were due to the size and the complexity of the deals in which IDC was involved.
“Our share of the pie is only a sliver,” he said.
While conversations with the customers involved continue to be positive, they aren’t going to rush to close a deal, he said, but being part of a bigger company would help accelerate the process.
“So yes, we are actively talking to some parties,” Mr. Archambault said. “We’re in the preliminary phase but we are very, very keen to find a strategic partner, whether it would be an outright purchase of IDC or key assets of IDC. Our No. 1 mission is try to save jobs in the market.”
Last June, IDC shareholders rejected the sale of many of the firm’s assets to San Diego-based Pico Digital. While Mr. Archambault declined to comment specifically on Pico, he did say IDC will approach “all parties interested from last year” as it intensifies its search for a strategic partner.
“That’s an obvious approach,” he said.
Mr. Barrett and Mr. Huin, both significant shareholders, will continue to be active in the company, Mr. Archambault said, since there is much work to do with a smaller team.
Mr. Archambault said IDC is hoping to have some sort of acquisition deal in place in the next couple of months, giving the company an idea of how many staff they can bring back.
"I would hope we’ll have some positive news instead of some negative news in the very near future,” he said.