Diamond to Cut 180 Jobs

Diamond Multimedia announced late Thursday that it will trim 20 percent of its combined current full-time and temporary workforce (approximately 120 full time and 60 temporary positions). In addition to the job cuts, the company will eliminate its low margin product lines, as well as tighten its belt in manufacturing and inventory control as well.

The reduction plan will result in a US$18-19 million charge for the fourth quarter.

"At the end of the third quarter, we announced the implementation of a short-cycle inventory model as a first step toward reducing our inventory cost structure," said William J. Schroeder, president and chief executive officer. "While we believe this step is in our long-term business interests, we concluded that further changes across the company were necessary to reduce our overall operating cost structure while still maintaining appropriate resources to provide excellent service to our customers and grow new product categories."

Upcoming Diamond products like the Rio portable MP3 player and the Monster Sound MX300 audio card will not be affected by the layoffs and are still scheduled to ship this month.