SurfStitch to cut 40 US jobs
Following a strategic review of its North American operations, online retailer SurfStitch will cut 40 positions from its US office by the end of October 2016.
The review included an assessment of the group’s long-term strategy and operations in the US and an extensive analysis around future sustainable and profitable growth.
Newly appointed CEO, Mike Sonand, said the decision to restructure its US operations was part of their focus to return to profitability and be cash-flow positive during the 2017 financial year.
“Where required, we can support US customers from both our UK and Australian operations, with a much lighter local presence and without compromising on service. This was not an easy decision to make, but we need to remain competitive in an extremely challenging North American environment, that has been particularly impacted by margin compression,” Sonand said.
SurfStitch said the restructure is not expected to result in any business disruption and customers and vendors will receive continuous operation and order fulfilment through the transition. The cuts will be made through both voluntary and involuntary redundancies.
“We remain confident in the potential of the US market and this restructure will allow us to become a leaner, more efficient and more agile organisation that does not have to compete on margins,” Lex Pedersen, director of business development and president of North American operations said. “Instead we can focus on providing customers with an enriched online experience.”
The company said it will provide a comprehensive review of its trading performance and an updated outlook in its full year results presentation in August, including detail of the impact of the US restructure and other key initiatives for FY17.
SurfStitch is forecasting EBITDA for FY2016 to be a loss, somewhere between $17.3 million to $18.3 million. SurfStitch expects to return to profitability and be cash-flow positive during FY2017.