Xata Cuts 29 Employees As it Shifts Toward Mobile Devices

July 6, 2012

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Xata Corp. has let go 29 employees as part of a shift away from onboard devices in favor of mobile technology, reports Twin Cities Business Magazine. The layoffs affected employees working on the company's older technology.
Xata is focusing on mobile devices such as tablets and smartphones.
Xata is focusing on mobile devices such as tablets and smartphones.

In May, the Eden Prairie, Minn.-based company added eight new tablets and smartphones certified to work with the Xata Turnpike fleet management solution, for a total of more than 85 devices certified to run Xata Turnpike.

"The days of multi-thousand dollar, difficult-to-install and proprietary platforms are fading away," said Christian Schenk, vice president, market development and product marketing, at the time. "A tablet by definition is a portable device that operates completely independent of other hardware or cradles, and doesn't require a three-hour installation. The Xata Turnpike solution self-installs in minutes and operates with a mobile device seamlessly without any bulky harnesses or cradles."

The company filed with the U.S. Securities and Exchange Commission on Tuesday. The cuts represent less than 10% of the Xata's workforce, reports the Minneapolis Business Journal.

The company says it expects the cuts to cost $800,000 in restructuring for the quarter that ended June 30, but the move will ultimately save Xata $2.8 million a year.

Also in the SEC filing, the company noted charges of between $1.3 million and $1.6 million to write off obsolete inventory. A $3.4 million impairment charge "on intangible assets associated with one of its legacy products" was necessary, the Journal reports.

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