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RealNetworks cuts 10% of staff to focus on the future

The company has reduced its workforce by more than 50% since 2010

Financial trends and news by Steven Loeb
August 13, 2014 | Comments
Short URL: http://vator.tv/n/389a

It's never an easy thing, but sometimes companies are forced to trim the fat, so to speak. Nobody likes it, obviously, but its a fact of life. The latest to have to go through this process is RealNetworks.

Only a couple of weeks after interim CEO Rob Glaser was named permanent CEO, RealNetworks is shedding 10% of its workforce, it was revealed in a document filed with the Securities and Exchange Commission on Tuesday. 

The company said that the job cuts, which equals a total of 85 positions, would be "primarily relating to its legacy businesses." 

The layoffs won't come cheap though: with serverance packages, RealNetworks expects to see its cost rise by approximately $1.5 million to $2 million.

In a note sent to his employees, which was then posted to Facebook, Glaser explained further why these cuts were necessary, and who exactly would be losing their jobs.

"We need to make these reductions to get more efficient because of the faster-than-expected declines in a few of our legacy businesses, most notably our codec IP licensing business and our 3rd party software distribution business," he wrote. "We discussed these declines in our earnings call 2 weeks ago and nothing has changed since then."

Roughly 75% of the people who lost their jobs were working on one of RealNetwork's legacy businesses, as the company is transitioning toward a focus on its new growth initiatives," which include RealPlayer Cloud.

Making such a move is "a hard process," and "sometimes the transition isn’t as smooth as we wish were the case, and this is one of those times," Glaser said. "Having said that, our board, our senior management team, and I all believe that we are on the right track with our new initiatives."

As for those who lost their jobs, Glaser insisted that "the vast majority" had already been made aware by the time this announcement was made, and that the company will be "providing those affected fair and generous severance, and in many cases outplacement help to find new work."

RealNetworks has been restructuring itself for over four years now. The process began in 2010, when Glaser first stepped down as CEO in January, which was then followed by two cut: the first with 60 jobs, and then another  85 jobs, including 25% of its executive staff.  

The last big layoff occured in 2012, when it laid off 160 people. Since the beginning of 2010, RealNetworks has gone from having 1,700 employees to having less than half of that number. 

(Image source: dublinnlplifecoach.com)


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