VeriFone Layoffs 2016: Warning Sign for Retail Technology Spending?
VeriFone Systems Inc. has confirmed layoff plans after announcing weak Q2 results and a downbeat revenue forecast today. The big question: Is VeriFone struggling on its own, or has the retail technology vertical somehow stumbled in recent months?
VeriFone makes point of sale (PoS) payment systems, but has pushing toward so-called omni-commerce — which involves media on terminals, pay-with-points, beacon networks and card-linked offers, among other emerging applications. The company’s channel partner program works closely with integrators across multiple areas of expertise.
VeriFone surprised Wall Street today with a weak revenue forecast. For the current quarter, the company expects revenue of $515 million, and earnings per share (EPS) on a non-GAAP basis of 40 cents. That compares to previous Wall Street expectations of $551 million and 59 cents a share, Barron’s reported.
Investors reacted swiftly. VeriFone’s stock (PAY) is down a brutal 28 percent in after hours trading.
VeriFone CEO Paul Galant confirmed layoff plans but did not disclose a specific headcount number. The layoffs will save about $30 million in 2017, he said. “We are aggressively executing mitigating actions including a headcount restructuring and a review of underperforming businesses,” Galant said in the announcement.
Meanwhile, pundits are wondering if VeriFone rivals have also witnessed sales issues in recent weeks. Anecdotal evidence from NCR suggests the retail point of sale (PoS) market remains healthy. During a late April 2016 earnings statement, NCR CEO Bill Nuti said 2016 was off to a good start. NCR has diversified beyond traditional PoS offerings to push deeper into SaaS and omni-channel sales solutions.
VeriFone joins a lengthy list of technology companies experiencing layoffs and staff cuts in 2016.