Australian e-health giant iSoft revealed late yesterday the full extent of the drastic action it will take in an attempt to halt its sliding financial fortunes, confirming plans to lay off 800 staff, constituting 17 per cent of its total workforce, over the next financial year.
On Wednesday, the company's chief executive Gary Cohen stepped down in the face of disastrous annual results over the past year that have seen revenues shrink. At the time, iSoft said it was planning to reduce staff numbers this year.
However, sources said the company had already gone through two rounds of layoffs over the past year — one in November last year, and one in July. Late yesterday, a company spokesperson confirmed those rounds had already seen 290 iSoft staff lose their jobs, with a further 800 more to go over the next year, more than 17 per cent of the company's total global workforce of around 4500.
iSoft's problems can be traced back to several issues.
Currency translation problems associated with the value of the Australian dollar with 73 per cent of iSoft's revenues over the past year were generated in pounds and euro, which subsequently affected the company's Australian reporting. But a decline in revenue has been suffered from the company's massive contract with the UK National Health Service, and its growth projections have also been reduced in most markets.
It's not all bad news for the company, though. This week its core business remained healthy, and the Australian Financial Review reported yesterday that analyst firm BBY had cited Oracle, IBM and Microsoft as potential acquirers of the company.
iSoft's share price has suffered due to its problems. Currently it is at 13¢, which is 1¢ above its 52-week low. It has ranged as high as 92¢ in that period.