In an effort to streamline costs, US technology distributor Merisel has reported it is cutting 700 jobs in the US and Canada and closing four warehouses.
In a statement issued Thursday, it said the actions are needed "to bring operating expenses in line with projected revenues" in order for the company to once again become profitable.
For the six month period ended June 30, Merisel reported a net loss of $US30.35 million, or 38 cents per share. For the same period last year, the company reported a net loss of $23.5 million, or 29 cents per share, the company said in a statement last week.
The company said it would cut 200 employees in Canada and about 500 in the US, where the company suffered its greatest losses. David Sadler, the company's CEO, said it would also shut down four US warehouses, keeping open its three largest warehouses in Illinois, California and Virginia.
More cuts are expected to follow in the U.S.
"We will be taking additional actions in the U.S. as we continue the restructuring," Sadler said.
"We are a primary competitor in Canada, and we have a significant opportunity to win additional market share and grow the business," said Mitchell Martin, the newly appointed president of Merisel Canada.
The company said it would continue to evaluate "strategic options with regard to each of its businesses."
Jeff VanSinderen, an analyst at B. Riley & Co. said Merisel's financial troubles stem from the fact that it's in a "tough business."
"The company's been facing challenges for some time. They're struggling," he said. "This is a tough business with thin margins. I'm not sure some [other company] in this business could do better."