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Descartes reports jump in profits as it reveals cutbacks, restructuring

Canadian supply chain software provider posts a 51% increase in net income, but says it will reduce its global workforce by 5% in the face of economic uncertainty

Descartes is bringing down costs as COVID-19 clouds the economic outlook. (Photo: Jim Allen/FreightWaves)

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.

Nate Tabak

Nate Tabak is a Toronto-based journalist and producer who covers cybersecurity and cross-border trucking and logistics for FreightWaves. He spent seven years reporting stories in the Balkans and Eastern Europe as a reporter, producer and editor based in Kosovo. He previously worked at newspapers in the San Francisco Bay Area, including the San Jose Mercury News. He graduated from UC Berkeley, where he studied the history of American policing. Contact Nate at [email protected]