Biometric firms trim up as they look to build strength

Wednesday, January 1, 2003

Two biometric firms have announced back-to-back restructuring plans that include a reduction in workforce.

Facial recognition company Viisage Technology of Littleton, Mass., announced it would reduce its work force by 16 percent, or 21 employees, as it stream-lines operations.

Bioscrypt, a Toronto-based company that makes fingerprint reader technology, also announced it would cut an undetermined number of employees as it looks to reduce operating costs. As part of the cost-cutting measures, Bioscrypt’s president’s salary was reduced 10 percent and all directors will forfeit fees.

“They’re not alone,” said Samir Nanavati, partner of International Biometric Group, a consulting firm that focuses on the biometric industry.

“In other words, that announcement is not atypical of where biometric vendors are right now. “A fair number are right now going through a belt-tightening phase,” said Nanavati.

The reason for the restructuring at some biometric firms, said Nanavati, is a ramp up of business to satisfy demand that was then followed by lower than expected demand.

Others are reorganizing, he said, because venture capital money is now more difficult to come by.

For Viisage, the restructuring involves forming two business units, Facial Recognition and Secure Identification.

Company officials say this will enable the company to relocate resources for sales and marketing to focus on the high growth facial recognition business.

Plans call for most of Viisage’s workforce reduction to take place in administrative and marketing operations, which is expected to save the company $2.1 million a year.

The restructuring for Viisage follows a trio of acquisitions for the company, which included Lau Security Systems, Bio-metrica Inc. and the intellectual property of the Miros division of

Bioscrypt, on the other hand, is looking to cut costs as it seeks profitability.

While the company recorded revenues of $1.71 million (U.S.) in its third quarter, which ended Sept. 30, net loss came in at $1.99 million.

Though difficult steps to take, Bioscrypt President and Chief Executive Officer Pierre Don-aldson said he is optimistic about business as the company ships more product.

The company reported shipping 5,600 units in its third quarter, a 53 percent increase when compared with the previous quarter.