Video and audio software company Avid Technology of Burlington said it would shut down offices and cut jobs in the beleaguered company’s latest restructuring plan.
According to a statement issued by the company, the effort should lead to cost savings of about $68 million. An Avid spokeswoman declined to provide the number of pending layoffs or which offices would be be closed.
In addition, Avid said it had obtained a new $105 million credit line that it will use to pay off an existing $35 million loan, finance the restructuring, and provide additional cash.
Avid gained renown in the 1990s for its digital video editing hardware and software. Avid systems became industry-standard tools in television studios and movie production companies worldwide. The company also became a leading provider of professional audio recording and editing gear.
“Avid has suffered from a series of acquisitions where they massively expanded their infrastructure and didn’t rightsize their business,” said Steven Frankel, senior research analyst at investment bank Dougherty & Co.
In 2004 and 2005, Avid spent $635 million to buy a trio of companies that made audio and video editing software for consumers. But sales were sparse, and by 2012, Avid sold its consumer businesses for a mere $17 million.
In 2014, Avid was temporarily ousted from the Nasdaq stock exchange because it had failed to publish its financial reports in a timely manner.
While Avid’s TV and movie industry customers value the company’s software, they no longer are willing to pay huge sums for the company’s custom-made video editing machines when cheap desktop computers have become powerful enough to handle the work. As a result, Avid’s core video-editing product is now software only and its hardware business has declined. Its stock price, once at $66 in February, 2005, closed at $7.65 on Monday.
“They haven’t lost their customer base,” Frankel said, “but their economic opportunity in their core business has shrunk.”\
This story has been corrected to reflect the right date for when Avid stock was at $66 a share.