Zi Corporation of Calgary has cut nearly 20 staff at its Hong Kong business unit, a reduction of more than 60 per cent, and cancelled a contract to provide voice-over Internet telephony equipment and design.
The high-tech communications company announced late last week that it has taken “immediate action” to address its Bluetooth and VoIP investments.
The staff cuts affect non-core specialty engineering and administrative employees in a unit that posted a $1.4-million loss in the first quarter of this year.
“We see a great deal of potential in Bluetooth and VoIP but market take-up has not yet materialized in a significant way,” said Zi Corp. CEO Michael Lobsinger.
“Reducing our personnel in this area enables us to significantly reduce our cash burn while awaiting the market for VoIP to rebound and adoption of Bluetooth technology to accelerate.”
Earlier in the week, the company reported a first-quarter loss of $5.7 million on revenue of $2.3 million.
Zi also said it was cancelling a contract with Cidco Communications Corporation to provide VoIP telephony equipment design.
Bluetooth technology, developed by Ericsson Mobile Communications as an idea for a wireless alternative in 1994, essentially enables devices in the same room to communicate with each other without being hooked together.
The technology is now being developed by a consortium of more than 1,300 companies worldwide.
“While the markets for Bluetooth™ and VoIP technology and products are expected to grow, the current business climate necessitated this strategic action by Zi and ensures that the company’s resources are better aligned with current market realities,” said Lobsinger.
