Nautilus Inc. laid off about 30 employees Tuesday as the company followed through on plans announced to investors last month.
That represented a staff reduction of about 7 percent for the company that had nearly 500 employees at this time last year.
“This is the first action of this type in nearly 10 years,” says a statement from John Fread, Nautilus director of global marketing communications. The reductions came from various departments at its Vancouver headquarters as well as other Nautilus locations, Fread said, including customer service, IT, product development, operations and marketing.
“We believe we’re now positioned to work more effectively with our partners, streamline operations, and focus on product development so we can continue delivering innovative fitness solutions to our global markets,” Fread’s statement says.
In mid-January, Nautilus issued a statement to investors saying its fourth-quarter results would fall far below projections. The announcement was made in advance of the company’s audited fourth-quarter and year-end results, which will be announced Feb. 25.
Nautilus CEO Bruce Cazenave also said in the mid-January statement that “we are embarking on an aggressive cost-containment program.”
That cost containment, Cazenave wrote, “will simplify and make processes more efficient, rescale the operations to be more profitable on a lower sales base, and increase our efforts in value engineering our products.”
The company said in its preliminary report that it expects annual revenue of $395 million to $397 million and operating income between $20 million and $21 million. Nautilus had previously forecast $431 million to $440 million in 2018 sales and operating income between $42 million to $45 million.
In response, shares decreased 40 percent to $7.02. They had a 52-week range between $6.78 and $17.20.
Tuesday’s action was “definitely in line with what they were saying” in January, said D.A. Davidson analyst Michael Kawamoto.
Kawamoto said Nautilus representatives told him at the time that “cuts in marketing and sales were likely.” At the same time, those representatives said staffing in research and development was expected to stay intact.
Nautilus shares closed Tuesday at $7.81 on the New York Stock Exchange, up 1.69 percent.