Job cuts at Vecima lead to ‘strong’ year end

Revenue up 20% after 10% of staff laid off in July

More than two months after slashing 10 per cent of its Saskatoon workforce, Vecima Networks Inc., reported “strong ” annual financial results, including an almost 20 per cent jump in revenue.

“Fiscal 2016 was an extraordinary year for Vecima,” Sumit Kumar, president and CEO of the Victoria, B.C.-based company, said in a statement issued Monday.

Vecima, which designs and builds communications and network tools in Saskatoon, said it earned $22 million, or $0.98 per share, on revenues of $108.4 million in the year ended June 30.

By comparison, the company — which was founded as Wavecom Electronics in 1988 — reported earning $15.1 million, or $0.68 per share, on $90.9 million in revenue in fiscal 2015.

Vecima laid off 34 people from its Cardinal Crescent manufacturing facility in July, leaving 355 employees in the city. Kumar said at the time the decision was necessary as the company’s business shifts away from high-volume, lowmargin products.

“We’ve kept this excess capacity for some time, and it reached the threshold where we had to make this hard decision,” Kumar told the StarPhoenix, adding he does not expect more layoffs in Saskatoon in the immediate future.

This is not the first time Vecima has laid off employees in Saskatoon. In 2011, the company cut 142 jobs in the city, reducing its employee count by almost 20 per cent in a move it said would save $6 million annually.

On Monday, the company said it expects reduced demand for its existing products and the rollout of newer products to lead to sales of between $85 million and $95 million in fiscal 2017.