Fuel cell developer Medis Technologies Ltd. (Nasdaq: MDTL) has laid off 50 employees at its Lod plant. The company remains with a workforce of 120.
Medis estimates that this measure will eliminate payroll and related expenses by $2.6 million, on an annualized basis, with the benefit expected to be realized starting in the second quarter of 2009. As a result of this streamlining, Medis anticipates making $430,000 in severance-related payments (of which $180,000 has already been incurred), which are mandated under Israeli law, or subject to pre-existing arrangements with the employees.
Medis also announced today that it is fully engaged in conversations with its major suppliers of goods and services and has initiated restructuring of its vendor processes and agreements.
Medis chairman and CEO Jose Mejia said, "While this is a difficult decision due to the impact on our employees, the cost rationalization plan will enable Medis to maximize the value of its portable fuel cell technology as the company continues its transition to a commercial entity."
He added, "These strategic actions were carefully considered and are consistent with our previously announced priorities and operational goals. Looking ahead, we are confident that the dedication and leadership of our senior management team will continue to make the necessary operational enhancements for our continued progress."
Media recorded a net loss of $46.2 million in the first three quarters of 2008, while the company's dependence on external investors saw its share lose 96% of its value.
In early trading on the Nasdaq today Medis share rose 2.53% to $0.41, giving a market cap of $18.28 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2009
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