GRAHAM WARWICK / WASHINGTON DC
Simulator visual-system supplier Evans &Sutherland (E&S) has cut 15% of its workforce to reduce costs as the expected rebound in its civil and military markets has not materialised. The company is not projecting a sustained recovery until 2005.
The cuts follow the completion of several loss-making military programmes begun in 1997 and the introduction of a new range of lower-cost image generators based on commercial technology.
With the latest reductions, Salt Lake City, Utah-based E&S has eliminated 250 jobs since November last year, reducing its workforce to under 400. The company believes the new round of cuts will position it to be profitable until revenue growth resumes.
"We have had to adjust to the deepest downturn in the history of our industry," says chief executive Jim Oyler. "We will have higher revenue and better margins in the second half of this year than the first half. However, we are not counting on a sustained market recovery until 2005."
The company has suffered a steep downturn in commercial flight simulator sales, which drive the company's civil visuals business. At the same time, US spending in military simulation has not increased as expected, with funds being diverted to operations in Iraq.
E&S believes the just-completed transition to lower-cost image generator designs shared across its civil and military product lines will help improve profitability.
Source: Flight International