Nixu Corporation Initiates a Cost Reduction Program to Address the Impact of the COVID-19
Nixu Corporation estimates that the COVID-19 pandemic will lead to a situation where economic growth pace will slow sharply in 2020 and the economic impact will continue still in 2021. Although digitalization will progress strongly and the need for cybersecurity will only increase after the pandemic, Nixu estimates that its growth opportunities will be limited in the short term. For this reason, Nixu has decided in the short term to cut down on growth investments aimed at bringing very strong growth (during past years averaging 30 % annually). Nixu will strive to grow in line with the market growth pace but focus on developing its operational excellence and service offering, and as a result, the company’s overall profitability.
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Adopting to the depicted market situation requires restructuring and a cost reduction program that will be implemented across Nixu Corporation. As of July 2020, the program will target a permanent cost reduction of EUR 200 thousand on a monthly level and an annual one-time cost savings of about EUR 1 million before restructuring costs during the full year 2020.
In August 2019, the company announced its growth ambition for the period of 2020-2024 according to which Nixu will seek strong growth in Northern Europe and expand its range of managed cybersecurity services as well as its position as a trusted cybersecurity go-to partner for large enterprises. The strategy nor the growth ambition of Nixu corporation has not changed. However, in the short term Nixu will not seek to grow according to its growth ambition. Instead, Nixu will secure the profitability and efficiency of its operations to be able to continue the implementation of its growth ambition as soon as the market situation normalizes. As earlier announced Nixu will not provide any financial guidance for 2020 for the time being.
CEO Petri Kairinen:
“Digitalization of society will make tremendous progress as a result of the COVID-19 pandemic and at the same time, the need for cybersecurity will only increase. Throughout the spring, our work to ensure the digital operations of our clients has continued quite normally. At the same time, we must bear in mind that now seen long-lasting lockdown measures will have such an impact on the world economy that the consequences are still largely unseen. For the reason, it is reasonable to shift our focus from striving for strong growth to securing our operative efficiency. This is particularly important because in this way we can ensure our capability to invest as the market returns to normal. Our current organization is built to support strong growth and for this reason we are unfortunately forced to make decisions that will also impact our employees in order to adapt to the new market situation.”