Imax Corp (USA) (NYSE:IMAX) stock was on the rise Tuesday following news of Imax layoffs.
The Imax layoffs will have the company reducing its workforce by 100 employees. All of the employees being hit by the layoffs will be full-time one. This will also include some employees at Imax China.
According to the movie theater company, the Imax layoffs will make up a total of 14% of its full-time workforce across the world. IMAX is expecting the layoffs to result in $15 million in aggregate pre-tax restructuring and impairment charges in 2017. It also expects $11 million of these charges to occur during its second quarter of the year.
The reason behind the Imax layoffs is a cost-reduction plan that the company is starting. IMAX claims that this plan will allow it to save $20 million per year. It plans to use these savings to increase profitability, operating leverage and free cash flow.
According to the company, it will start seeing the results of the Imax layoffs during its third quarter of 2017. It plans to provide an update concerning the cost-reduction plan during its earnings report for the second quarter of 2017, which will come out in late July.
The Imax layoffs announcement also came with some other news from the company. It is starting another buyback program with a limit of $200 million. This program comes as the previous one approaches its conclusion at the end of this month.
IMAX stock was up 5% as of noon Tuesday, but is down 19% year-to-date.
