Wearable tech company Dorsavi is cutting staff and slashing salaries
Dorsavi (ASX: DVL) is focusing on cost cutting measures as sales momentum slows.
It continues a rough period for the wearable tech play, which makes motion-sensor devices that track human movement for health and safety purposes.
The product can be applied across three sectors — clinical patients, elite sport management and occupational health and safety.
Dorsavi was a first-mover in the sector, and by the end of 2017 it had expanded into the Australian, US and UK markets. With regulatory approval signed off, the plan was to scale up.
But despite some lofty goals, Dorsavi has struggled to execute its strategy over the past 12 months, with the share price falling from 21.7 cents to 3.5 cents.
This morning, the company announced a “reduction in operational and labour expenses to take effect immediately”.
For starters, the company’s US-based CEO Andrew Ronchi has agreed to take a 28.5 per cent pay cut, to $US221,500 from $US310,000.
Dorsavi will also reduce marketing costs and focus its development budget towards existing core products, rather than any new initiatives.
“The net effect of these changes is that staff numbers have been reduced in corporate and support services whilst the Company maintains a focus on building revenue and sales capability,” the company said.
And lastly, Dorsavi’s non-executive directors will forego guaranteed remuneration. Subject to shareholder approval, they’ll instead be issued options at the end of each quarter based on the closing share price that day.
The company hopes the cumulative effect of the measures will be to reduce cash outflows by 30-40 per cent from the six months to December 31.