ScanSource cut in staff due to coronavirus

ScanSource has said it will lay off 200 employees after seeing multiple areas of its business hit hard by the coronavirus pandemic.

ScanSource CFO Gerry Lyons said that the layoffs were made across multiple business units but focus on non-customer facing positions in the company as well as the distributor’s Salesforce-focused Canpango division.

During an investor call, ScanSource chief revenue officer John Eldh said the reductions include its sales support and sales administration roles, as well as staff in both sales and supply roles in its on-premise communications business.

Most of the reductions are in ScanSource’s North and South American business.

ScanSource’s POS (point of sale) portal business will see headcount reductions in the single digits, but ScanSource’s Intelisys business is unaffected

Canpango has not met its profitability and return thresholds and there has been limited adoption of the unit’s implementation and consulting services by the distributor’s partner community.

As part of the cost saving plan, ScanSource’s executive team has cut their salaries until 31 December, with Baur forgoing 25 percent of his salary, CFO Lyons 15 percent and chief legal and strategy officer Matt Dean 10 percent.

Cash retainers have also been cancelled for the company’s board of directors until 31 December.

The measures hope to reduce ScanSource’s annualised selling, general and administrative (SG&A) cost base by $30 million.

The distributor is also hoping to return its operating profit margins to the mid three percent range at least for some quarters during its 2021 fiscal year.