n a move to create what it called a "next generation organization structure," Hypercom Corp. announced on June 29, 2005 that it had eliminated senior management positions, laid off workers, cut payroll and benefits packages, and consolidated software development facilities.

The company said the cutbacks followed "the completion of an organization review designed to refocus the company to compete more vigorously in its markets and to generate improved operating results."

Hypercom has its headquarters in Phoenix and subsidiaries around the world. The global reorganization was effective June 30, and the company plans to implement more streamlining and cost-cutting measures before the end of this year. Hypercom said it expects to save $15 million a year through the cost-cutting measures. The savings will result from a 20% reduction in base payroll, benefits, bonus and incentive compensation, and travel and related expenses.

Employing approximately 1,500 people worldwide, Hypercom cut more than 100 jobs as part of the reorganization. It eliminated 21 senior management positions with titles including Executive Vice President, Senior Vice President, Vice President and Regional President, and terminated more than 25 employee annual pay packages, each in excess of $100,000.

Hypercom will also consolidate the majority of its core software and applications development capability into its existing non-U.S. development facilities.The company will post a one-time employee termination expense of $1.6 million but expects to benefit from savings due to cost-cutting measures by the fourth quarter of 2005.

"Our new organization is more customer-focused and streamlined, with the necessary resources and talent to win in the market today and tomorrow," William Keiper, Hypercom's Chairman and Interim Chief Executive Officer said in a statement.

It's been a rocky year for Hypercom, which reported a loss of $8.7 million on revenue of $255.2 million for fiscal year 2004; two key executives left the company, and several lawsuits were filed against it (See "Several Lawsuits Filed Against Hypercom," The Green Sheet, Feb. 28, 2005, issue 05:02:02.)