724 to reduce workforce

Toronto-based 724 Solutions Inc. on Thursday announced it will be reducing its workforce in order to increase profitability.

The software company – which makes wireless Internet products geared towards financial institutions and mobile operators – will be slashing approximately 100 jobs worldwide by the end of the third quarter of the year. 724 anticipates that this move will translate into an annualized cost savings of $16 million.

The company said it will take a cash restructuring charge of approximately $5-7 million due to this action, as well as an unrelated non-cash restructuring charge of approximately $7 million in the third quarter of 2002 due to the write down of earlier investments.

“We have made substantial progress over the past year in reducing the operating costs of or business,” said the company’s CEO, John Sims, in a statement. “As we have said in the past, we continue to evaluate our relative investment in the different segments of our business in order to fit market opportunities.”

The company also announced Thursday that its Chief Financial Officer and Senior Vice-President of corporate services, Karen Basian, will be leaving the company at the end of October. The company’s current Vice-President of finance, Glenn Barrett, will be taking her place.