The automated teller machine company Diebold Inc. is planning to trim about 5% of its work force as part of an accelerating effort to reduce costs.
The North Canton, Ohio, company announced the cuts Wednesday and also said it had completed an accounting audit for the past several years. The Securities and Exchange Commission has been investigating Diebold's so-called "bill and hold" accounting practice, and the company said last year it would discontinue the practice.
Under bill and hold, the company would book sales revenue before products were delivered. It will now book revenue when products are delivered and, as a result, must restate its revenue for the past several years.
Diebold's updated results add $27 million to its 2006 revenue and $31 million to its 2007 revenue, but it must reduce by $190 million its revenue for years before 2006.
The company reduced its head count by about 100 people in the fourth quarter and in total is planning to eliminate about 800 jobs, mainly in North America, Brazil, and Europe. It also said it would consider outsourcing some noncore work.
With the updated accounting, Diebold estimated that it would report 2007 revenue of $2.95 billion, up 1% from 2006. It now expects revenue to grow 6% to 8% this year compared to 2007.
The company said that it expects automated teller machine sales in the United States to be flat this year or to fall by as much as 5%. Diebold's chief executive, Tom Swidarski, said in a press release that "the deteriorating condition of the credit markets within the U.S. bank industry will likely result in reduced capital investment in branch construction, which would negatively impact our financial self-service and security businesses in 2008."
Diebold's share price rose on the news. By midday Wednesday the stock was up 4.97% from Tuesday's close, at $27.24 a share.
