Appen shares surge after announcing cost cutting measures
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More news: Appen shares soared 9% to 30 cents in early trading on the ASX after the company announced new cost saving initiatives to offset the loss of its Google contract worth $126 million per year.
Cost saving initiatives included the closure of its North American offices.
Appen announces cost savings, shuts North America offices
The news: Data services firm Appen has announced $US13.5 million ($20.7 million) worth of cost-saving measures, including closing two of its North America offices.
The numbers: Appen said it expects to complete 80% of the cost initiatives by March 2024, and the remainder by June 2024. The company also expects to incur one-off costs associated with implementing the cost reductions of between USD1.5 million and USD2.5 million.
Appen shares plummeted 40% in January after Google terminated its contract with the Sydney-based firm, ending a deal worth $126 million and 26% of its gross revenue in the 2023 financial year. Earlier this month Armughan Ahmad abruptly resigned as CEO after 12 months in the post, and replaced by former COO Ryan Kolln.
The context: Appen said the new cost initiatives "represent direct and indirect costs associated with the delivery of Google projects". As part of the measures, the company announced the "eventual closure" of its Toronto and Bellevue offices, while maintaining its US site in Kirkland, though there was no indication of the number of jobs that would be cut.
The source: ASX announcement
