Healthcare IT and advanced visualization developer Merge Healthcare announced that it plans to cut staff and jobs in 2008 in an effort to manage costs.
By the end of March, the Milwaukee-based firm will reduce its worldwide staff by 160 people for a total of 440 employees, compared to 600 in September 2007. The company expects to lose another 20 people due to attrition by September of this year.
Merge will cut 45 jobs in North America and Canada, and 115 offshore positions, for a total of 28% of its workforce. These reductions are effective immediately, the company said.
Merge will take a $2 million charge in the first quarter of 2008 (end-March 31), consisting of $1.3 million in severance costs and $700,000 in legal fees and future lease payments on its Burlington, MA, office, which the company has vacated. Merge expects the cuts to produce annual savings of $7 million.
The company attributed its actions to the impacts of the Deficit Reduction Act (DRA) of 2005, as well as ongoing legal expenses and two financial restatements, according to Merge.
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