Prism says its cost-cutting measures, including some staff layoffs, will save the company about R2 million per month, but will not affect the company`s future revenue.
Prism has completed a rights offer to inject further capital into the firm, which was severely cash-strapped, but CEO Alvin Els says additional measures needed to be taken.
Although one of Prism`s original investors, Archway Technology Venture Capital Fund, underwrote the rights offer and boosted Prism`s coffers by R55 million in December, the company has retrenched around 40 people, mostly from its South African operations.
"All in all, the cost-cutting measures we have implemented will save Prism around R2 million a month. Salaries account for between 60% and 70% of our monthly expenses and we had to try bring this down," says Els.
He adds that the cost-cutting measures will have no impact on Prism`s continuing development such as its current business deal with SchlumbergerSema.
The companies are in a joint venture to manufacture cellular SIM cards using Prism software and the Johannesburg company stands to make around R40 million from the first batch alone.
Els says the cost-cutting measures, including the layoffs, have been on the cards for some time.
Commenting on the performance of the Prism share price, he says: "The local markets have always been quick to react. I think investors and analysts should compare Prism`s performance to some of our competitors as well as looking at our track record before jumping to conclusions about our future.
"Prism has been a going concern - and a healthy one at that - for over 15 years and our listing was based on a business of core competencies. We didn`t just throw some companies together and list them. We are still making an operating profit year after year and we accept that you have to take the good with the bad."
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