In an unfortunate sign of the times, Avatech Solutions has reduced its workforce by 41 more people, according to a filing with the Securities and Exchange Commission. These latest layoffs follow an earlier reduction layoff of about 20 people in April, now leaving the company with 146 staffers. According to the filing, the majority of the recent staff cuts were in the company’s services department, while the rest were in sales and marketing. In total, the layoffs are intended to save the company around $3 million per year and are in addition to a 10% across-the-board pay reduction and a hiring freeze.
Avatech has also sold its BIMreview software application to Autodesk, raising $500,000 in cash (although $125,000 remains in escrow until the dust settles and all is proven to be as warranted. If all goes well, Avatech gets half in a year, and the other half in two years).
Avatech’s total revenue declined 38% in the March quarter, with a nearly 50% drop in product revenue, leading to a $200,000 loss for the period and a $550,000 loss for the nine months of the fiscal year to that point. Since over 90% of Avatech’s revenue typically comes from sales and services related to Autodesk products, one can’t help but wonder what this layoff signals for June-quarter revenue — for both Avatech and Autodesk.