In-store marketing company Insignia Systems, Inc. cut its work force Friday by 21, or 17%, in a move to preserve its competitive position.
The company expects to save $840,000 annually as a result of the terminations. Severance expenses of about $70,000 will be reported in the fourth quarter. Further expense reductions are under consideration to save the company an additional $1 million in fiscal 2004. Following the cuts, the company employs about 100 people.
“We need to do what we can to cut expense so that we’re performing better financially so that we can prevail in the long run in our battle with News America,” president and CEO Scott Drill said.
News America, a division of News Corp., which is owned by Rupert Murdoch, filed a lawsuit in October in the United States District Court for the Southern District of New York against Insignia over its exclusive third-party at-shelf marketing rights with retailers. New York-based News America offers a wide range of in-store promotional products.
Last month, Insignia said it expected to report a $1.5 million loss, a number that could grow because of legal fees associated with the lawsuit. The company expects to report revenues of about $5.3 million.
“The lawsuit is baseless and without merit,” Insignia chairman Gary Vars said in a statement last month. “News America and Rupert Murdoch are proposing the outrageous notion that anyone who tried to compete with them is illegally interfering with their monopoly.”
News America declined comment citing the pending legislation.
Minneapolis, MN-based Insignia develops and markets in-store promotional products, programs and services.
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