4Kids Entertainment is to implement certain cost cutting initiatives designed to 'better align its organisation and overall cost structure' in the current challenging economic environment, including cutting 15 per cent of its workforce across all subsidiaries and divisions.
As a result of the staff cuts, the company will be incurring severance costs of approximately $375,000 in the fourth quarter of 2008.
4Kids has also completed a comprehensive review of its operations and will be taking steps intended to reduce operating expenses by an additional $4-$5 million in 2009.
The staff reductions and projected cuts in operating expenses, together with the early termination of the 4Kids/Fox Broadcasting agreement effective from December 31st 2008, are expected to result in pre-tax savings of $15-$18 million in 2009.
"We have taken some critical steps to respond to the litany of challenges presented by the worldwide economic crisis," said Alfred Kahn, chairman and CEO of 4Kids. "The streamlining of our organisation and further reduction in operating expenses will better position the company to ride out the current economic storm."