TearLab Announces Strategic Restructuring; Job Cuts

Monday, February 29, 2016 | Earnings & Financials , TearLab Corp.


TearLab announced a strategic restructuring, including a staff reduction of employees, designed to improve the company’s overall cost structure, extend its cash runway, and shorten the time required for it to achieve positive cash flow from operations, according to a company news release.

Following the restructuring, TearLab will have approximately 80 employees, which represents a reduction of 54 positions. The company expects to incur restructuring costs related to this action of approximately $300,000 associated with personnel-related termination costs in the first quarter of 2016, and it expects savings from its staff reductions and other restructuring efforts to reduce annualized operating expenses by approximately $9.4 million, compared to the full year 2015. The company noted this amount does not include any of the approximate $3.5 million reduction in annualized operating expenses that it expects to achieve through the planned divestiture or orderly wind-down of its majority owned OcuHub subsidiary, announced on February 1, 2016.   

"We remain very excited about the momentum we built in 2015 and are well positioned for continued growth,” Seph Jensen, TearLab’s Chief Executive Officer, said in the news release. “Nevertheless, given the current market environment, we needed to take this difficult step now of restructuring the company to reduce spending and improve our operating efficiency. We believe that we now have the optimal sales force and office support staffing levels to successfully drive a new model that will allow us to continue to grow our device footprint and utilization. Our core focus going forward is to reach self-sustainability by driving increased adoption of our diagnostics platform.”

The company plans to provide further insight into its new operating model when it reports fourth quarter and full year 2015 results and holds its corresponding conference call on March 8, 2016.


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