Smartphones sales are steadily going down for a while now. In fact, Apple might announce its first iPhone sales decline in the next quarter. The companies’ suppliers are the most affected by this decrease is sales. Countering this problem, UK based graphics company Imagination Technologies announced on Thursday that it will be restructuring the company.
The company had announced in February that it was laying off 150 people in order to reduce operating costs. Today’s announcement states that 200 more people will be loosing their jobs and Imagination will also be shutting down a fair number of operations in process.
According to estimates in December, Imagination Technologies has seen a dip in revenues and expansion in operating costs. The company had announced last month that it would be cutting operating costs by £15 million ($22 million) in the next financial year, which ends April 2017, implementing cost reductions in the current FY (ending April 2016). Along with this, the company also aims to reduce its cost base by 12.5 million pounds ($18 million) per year by the next FY.
The company is reportedly going to shut down Pure, its consumer electronics division that makes devices like digital radios to cut down operating costs and generate higher revenue.
This swift and decisive action will put us back on a sound financial footing and will enable us to have the necessary resources to further strengthen our three core businesses,
said Andrew Heath, the company’s interim CEO.
They are unaffected by these cuts.
Imagination licenses graphics and semiconductor IP to major tech companies in Silicon Valley. Its most widely known customers are Apple and Intel, both of which share stakes in the UK graphics giant. Apple currently holds an 8.4% stake and Intel holds just about 5%.
Though there will be workforce reductions and closures of some operations in the company, three of its main operational sectors will remain intact. These include graphics and multimedia (Imagination’s PowerVR business), processing (its MIPS processor business that it acquired in 2012) and connectivity (its Ensigma low-power communications IP business).
The company hasn’t shared much details about the new development and what other sectors will be affected.