Slot manufacturer International Game Technology announced that it will trim its global workforce by 7 percent and institute other cost-cutting measures in response to declining revenues in U.S. regional gaming markets.
The cost-cutting measures are expected to save $30 million in the current fiscal year and an estimated $50 million on an annual run-rate basis, according to the company.
The company also announced it is lowering its fiscal year 2014 guidance for adjusted earnings per share from continuing operations from $1.28-to-$1.38 to the $-to-$1.10 range. The company is also providing guidance for adjusted earnings per share from continuing operations of $0.17 to $0.19 for the second fiscal quarter of 2014.
“As we reach the halfway point in our fiscal year, you can see this is a challenging time for the industry and IGT,” said IGT CEO Patti Hart. “We knew that our success in 2013 would be difficult to replicate. However, we did not expect such a sharp decline in North American gross gaming revenues, or further degradation in the international currency, compliance, and importation environment.”
In addition to the cost-cutting measure, IGT announced several moves to realign its business:
• continued commitment to improve its gaming operations performance;
• the launch of Powerbucks, a new interstate progressive jackpot, in Nevada, New Jersey, South Dakota, and Canada, expected by the end of the fiscal year;
• a new agreement with Action Gaming to solidify IGT’s 90-plus percent market share in video poker;
• a re-engineering the game development process to leverage strength in social gaming to improve land-based game performance; and,
• an increased commitment to the Asian market.
