A third, and likely final, wave of layoffs at Little Rock-based Acxiom Corp. began on Wednesday as the database marketer continued its push to realign its workforce to meet changing industry demands.
Acxiom indicated in November 2013 it would cut its overall labor force by March in an effort to save $20-$30 million annually.
Acxiom has been investing in new products and services geared towards more sophisticated consumer data collection and target marketing via the Internet as some of its traditional, core business silos have seen declines in revenue and profitability.
According to Talk Business sources, fewer than 200 workers nationwide are part of this round of layoffs with around 100 in Arkansas. Some workers are home-based and not necessarily employed at the company’s Little Rock or Conway operations.
A smaller contingency of upper management personnel were let go last year after Acxiom announced its “restructuring program,” and some middle management cuts were made in January.
Acxiom’s director of corporate communications Ines Gutzmer provided this statement to Talk Business:
As communicated in our last earnings call, Acxiom has embarked upon an initiative to increase efficiencies and further improve performance. This is a company-wide, multi-phased approach, and our goal is for all associated actions to be completed by end of this fiscal year. We are on track to meet this timeline, and we hope to provide an update as soon as the process is completed.
Acxiom’s fiscal year ends March 31, 2014.
In its second quarter earnings report in November, Acxiom disclosed: “The company expects over the next 6 to 12 months to reduce its annual cost base by roughly $20 to $30 million. These reductions will not impact the company’s ongoing investment in the Audience Operating System or the continued investment in innovation.”
In a subsequent SEC filing, Acxiom disclosed: “The initiative seeks to improve the company’s performance by simplifying the company’s management structure, centralizing duplicative efforts and standardizing workflows. The components of the restructuring program are not finalized and actual total savings and timing may vary from those estimated due to changes in the scope or assumptions underlying the restructuring program. The restructuring program will occur in a number of phases, and the company is unable to make a determination of the estimated amount or range of future costs and cash expenditures. The company will file an amendment to this report upon the determination of such amounts.”
While alluding to a workforce “reduction,” company leaders never specifically stated that employees would be laid off but the suggestion was clear. Internal sources later confirmed that layoffs were part of the initiative.
Acxiom CFO Warren Jenson said in an earnings call with investors and the media in November that it would not be a “slash and burn” effort. Jenson said there would be “measurable actions before year-end.”
In a subsequent question, he declined to give a timeline stating that the reductions would be “linear not back-end loaded.” He reiterated that areas where the company has duplication and a need for centralization would be a focus, as would a longer-term rethinking on work flows, particularly in engineering, that could be reconfigured by workforce and processes.
The company said that client losses in its ITO (Information Technology Outsourcer) area were partially attributable for the workforce reduction. Acxiom previously reported in its first quarter that its ITO division had a string of “bad luck.”
The $20-$30 million in savings from the cost reduction effort will be reinvested in other areas of the business, Jenson and CEO Scott Howe said at the time.