Motricity, the struggling Bellevue maker of mobile software, has restructured its business and decided to close down its operations in Asia. Interim CEO Jim Smith said the moves will “lay the foundation for long-term success and reignite growth.”
Motricity has taken it on the chin in recent months, losing key contracts, axing top executives and watching its stock plummet. In fact, Motricity, which moved to Bellevue from North Carolina after buying mobile assets of InfoSpace, was the worst performing tech stock in Washington state last year.
Wall Street appears to like the new direction. The stock is up more than 22 percent, and just crested $1 per share for the first time in about a month.
Last week, GeekWire reported on the company’s loss of a key contract in Asia with PT XL Axiata, a customer that accounted for 11 percent of Motricity’s revenue during the first nine months of last year.
Several top executives, including CEO and co-founder Ryan Wuerch, have left the company in recent months.
Motricity went public in 2010, but it ran into serious problems last August after its financial results came in well below expectations. But Smith said that the recent changes will help put Motricity back on solid footing.
“As a company, we have made significant adjustments to our cost structure, organization and strategy,” said Smith. “Given our depth of talent, rich history in mobile and strategic focus on mobile enterprise and advertising, I’m confident that the changes we’ve instituted will help deliver enhanced shareholder and customer value.”
It is unclear how many people are losing their jobs in the current restructuring throughout the company, but the Asian closure will lead to 135 workers losing their jobs. The closure of the company’s Singapore office and an Indian data center and office will will cost the company $2.5 million, with the closure to be completed by April, according to a SEC filing.
We have an email into the company to find out more and we’ll update the post as we find out more.
UPDATE: Motricity plans to employ between 320 to 350 people after the Asian unit is shut down. Interim CEO Jim Smith issued this statement:
“As part of our restructuring efforts, we’ve made substantial reductions to headcount. However, the reality of the situation is that we are continuing to wind down certain areas of our business, which means that while people have been notified that their position will be eliminated, they are still included in our headcount. At present, we have approximately 320-350 FTEs, but we expect that, as a result of the recently announced reductions and our continued review of our costs structure, that number may be lower by the end of Q1.”