Austin-based National Instruments Corp. says that it plans to lower its number of employees this year in a move the company calls a “headcount reduction.” The announcement comes on the heels of a sales slowdown for the company in its fourth quarter.
The company clarified Friday that the headcount reduction will be achieved through attrition -- which means not filling some jobs when employees leave -- along with performance management and “rebalancing our resources.” The company says it is not planning layoffs. It said the headcount reduction will be in the “low single digits.”
Performance management is a human resources term that means either firing someone for not meeting their performance goals, or moving them into a different department or division within a company.
It is different from a layoff, which typically affects a large group of employees regardless of their performance and is related to a company’s overall financial health.
A written statement from interim chief financial officer John Roiko said that this is the first time the company has had a headcount reduction since 2014. That same year National Instruments canceled a big expansion plan in Austin that would have added 1,000 jobs.
National Instruments employs about 2,500 in Austin and 7,500 worldwide. The company makes testing equipment and software used by scientists, engineers and researchers.
The company on Thursday reported fourth-quarter profit of $33.8 million, a 5 percent increase from the same quarter a year ago.
On a per-share basis, the company said it had profit of 26 cents. Earnings, adjusted for stock option expense and amortization costs, came to 34 cents per share.
The maker of scientific measuring equipment and software posted revenue of $328.5 million in the period, which is down 2 percent from the same time a year ago.
National Instruments’ shares were down over 2 percent in afternoon trading on Friday.
Richard Eastman, a financial analyst for Robert W. Baird and Co., praised the company’s efforts at “expense discipline” in a research note issued Thursday.
He said that the company’s reduced operating expenses and headcount reduction plans offer “evidence of a better-than-we-expected cost management effort.”
The company blamed “foreign currency exchanges,” and a big drop in orders from its biggest customer for this decline. The company said it received $2 million in orders from its largest customer, compared with $9 million from this same customer in the same quarter a year ago.
As a result, National Instruments missed the midpoint of its guidance, which means the company didn’t bring in quite as much revenue as executives thought it would.
Roiko said in a written statement that the company is “disappointed” at missing its revenue guidance for the fourth quarter.
The company’s new CEO, Alex Davern, said his “top priorities” in 2017 are growing revenue, improving their operating margins and “leveraging our investments in our platform and people.”
For the year, the company reported profit of $87.4 million, or 68 cents per share. That’s an 8 percent decline from the year before. Revenue was nearly unchanged at $1.23 billion.
National Instruments shares have risen 3 percent since the beginning of the year.
Editor’s note: This story was corrected on Friday to clarify that National Instruments says it will reduce its headcount without layoffs.
The Associated Press contributed to this report.
News on Open Source is free and unlimited. Access to the rest of 512tech.com comes with an American-Statesman digital subscription, which also includes myStatesman.com and the ePaper edition. Subscribe at statesman.com/subscribe.