Descartes Systems Group (NASDAQ:DSGX) reported a jump in profits during the first quarter on May 27, but the Canadian supply chain software provider said it will reduce its global workforce by 5% as it restructures to bring down costs.
Descartes generated $11 million in net income, or $0.13 per share, during the quarter, a 51% increase from a year ago. Revenue grew by 7% to $83.7 million.
But the Ontario-based company said it has begun restructuring in response to the economic uncertainty from COVID-19. Descartes, which has about 1,500 employees, will trim its workforce and close some offices over six months.
“We have some customers who are struggling to keep up with demand in their business, while others have seen sharp drops,” CEO Edward Ryan said in a statement.
Descartes anticipates that the restructuring will ultimately save the company $6 million to $7 million per year.
Ryan discusses the results with analysts later today.