Gtech Holdings Corp. cuts 175 positions

Tuesday, Aug. 29, 2000 | 10:39 a.m.

THE ASSOCIATED PRESS

WEST GREENWICH, R.I. -- Gtech Holdings Corp., the country's largest supplier of automated lottery systems, said today that in the past week it cut 4 percent of its staff, or 175 jobs, as part of its effort to focus on its core lottery business and improve its stock price.

The company, which now has about 4,500 employees, said it expects the moves will save $24 million to $26 million a year. It will take a $40 million charge in its fiscal second quarter ended Aug. 26 for the restructuring. The company had $1 billion in revenue in its fiscal year ended in February.

Gtech said it will no longer help Indian tribes develop casinos or operate parimutuel machines at racetracks. As a result, it is closing its office in Boca Raton, Fla., which had about 50 employees. Fifteen of the workers will be transferred to Gtech's headquarters in West Greenwich, R.I., while the rest have been laid off.

The moves are a result of a business review Gtech announced in July to try to boost its stock price. At the time, Gtech announced that chief executive William O'Connor and president and chief operating officer Steven P. Norwick resigned, and said its second quarter results would fall below Wall Street's estimates because of higher-than-projected costs and lower-than-expected contract fees.

Shares of Gtech traded at $17.438 each, down 6.25 cents, or 0.4 percent, on the New York Stock Exchange this morning.