Shares of Cognex (CGNX -1.71%) have plunged today, down by 10% as of 1 p.m. EDT, after the company announced it was laying off workers in an effort to cut costs. The machine-vision specialist will also reduce leased office space.
Cognex said it will be laying off approximately 190 employees, or 8% of its total head count. CEO Rob Willett, Chairman Dr. Robert Shillman, and the board of directors have all agreed to waive their cash salaries and fees for the rest of the year. Cognex had already been working to reduce spending and limit hiring activity.
"It is very unfortunate that these measures are necessary," Shillman said in a statement. "The confidence we have in the future of our business remains unchanged; unfortunately, that future is a bit further off than we would like due to the significant disruption of the global economy."
The COVID-19 pandemic is impacting the machine vision tech company in various ways. Cognex noted on its last earnings call that certain sectors it serves -- like e-commerce and medical equipment -- were seeing strong demand due to the coronavirus outbreak, but other industries -- like automotive -- were getting hit particularly hard. The automotive industry was Cognex's biggest end market last year.
In connection with the job cuts and lease terminations, Cognex expects to recognize a restructuring charge of $20 million in the second quarter, which will yield annualized cost savings of $25 million. The company will also eat a non-cash charge of $15 million to $30 million related to inventory writedowns and intangible asset impairments.