The company warned on Friday that it will miss analysts expectations for earnings in its current quarter, which ends September 30. It expects to reach "about break-even".
Imation blames this on weaker-than-expected demand for its products, pricing pressures, and the negative effect of foreign currency pressures, particularly from the Euro. Approximately $8 million of the anticipated revenue decline is the result of foreign currency translation. Sales of newer products generally showed good year-over-year growth, says the company.
To minimize the damage, Imation has hired investment banking firm, Goldman Sachs to help it examine strategic alternatives, such as financial restructuring, stock repurchases, spin-offs, joint ventures, and business combinations.
MacCentral reports that the company intends laying off ten per cent of its staff, and launching a series of other, drastic, cost-cutting measures
Imation also said that it expects to record $32 million in restructuring charges and a $66 million non-cash software write-off charge in the second half of the year.