Barco announced today a restructuring plan to align the organization with changing market demands and growth opportunities while enhancing the company’s long-term profitability. This comprehensive plan addresses specific aspects of Barco’s organizational structure and effectiveness particularly in the areas of product management and commercial and service delivery processes. The plan also includes the re-investment of cost efficiencies towards certain growth initiatives, innovation and further business expansion in target geographies.
“To bolster Barco’s fitness to lead in an ever more global and dynamic market with rapidly evolving customer demands, it is imperative that Barco becomes more organizationally agile, responsive and customer service focused,” said Jan De Witte, Chief Executive Officer of Barco.
“Since launching our ‘focus to perform’ program in 2016, Barco has made measurable and steady progress primarily by rationalizing the business portfolio and part of its manufacturing footprint, and by implementing value engineering initiatives. With this plan we take the next step in our ‘focus to perform’ program and embrace Barco’s future as a successful hardware, software and services company,” added Jan De Witte.
Over the course of 2019, the program might affect around 240 positions across the organization, of which around 55 are based in Belgium. Production worker positions are not impacted. In addition to enhancing business effectiveness, Barco expects to reduce its indirect expense-level by approximately 20 million euro by 2020, net of re-investments in strategic growth initiatives. As a result, Barco expects to record a restructuring charge in the fourth quarter of fiscal 2018.
“We are engaging with the employee representatives in the different geographies where we operate to start a constructive dialogue on this plan and expect to be able to find appropriate solutions in the interest of employees that could be affected,” concluded Mr. De Witte.
To implement the plan, Barco will deploy the following initiatives in 2019:
- Group software development departments into one global software development structure
- Rebalance marketing, service delivery and project management capabilities for stronger regional empowerment
- Re-align and strengthen marketing & product management capabilities to ensure end-to-end responsibility for delivering solutions encompassing software, hardware and services
- Streamline organization and simplify decision making, while eliminating functional duplications across the organization
- Rationalize external spend and practices for procurement of external services
Barco didn’t specifically say who would be affected, but reading between the lines, here is what we think will happen:
- Barco will give more marketing independence to the regional offices and spend more on social media marketing programs and less on traditional advertising channels. In fact, it is likely that you’ll see Barco pull all print advertising and focus exclusively on digital (this is logical as with digital, you can reach individual people). Over the past five years, Barco’s had a lot of Belgium-led control over marketing efforts in an effort to be consistent globally. But not every area of the world is at the same place, digitally. So, as they move into a digital-first initiative for marketing, they need to decentralize marketing so that each country can be targeted differently. For example, in EMEA, very few people will accept B2B content via Facebook. But, in the USA, this is more common. In addition, in the EMEA regions, the analog publications are disappearing quicker than in Asia. So, allowing country-specific marketing approaches will still allow for consistent messaging but the use of different channels.
- As we all know, selling software in the ProAV channels not only difficult, it has proven to be nearly impossible. In fact, the few companies that have done it bundle it with hardware. Those that don’t, either die or try it for a while and then refocus on hardware. Remember when Prysm tried to sell collaboration software? Barco has tried, unsuccessfully, to sell its Overture control system platform. It’s actually a very good simple, small room control platform but they are trying to sell it as a SaaS-ish software tool. That’s not working. You will see Barco integrate more of their software initiatives, like Overture, into the hardware. More similar to what they are attempting with weConnect. In addition, you’ll likely see more cross-platform compatibility.
- Barco will likely divest themselves of low-volume projects and products. You will see a renewed push on high-volume products like ClickShare (with more future versions of that) as well as their F-Series projectors while a consolidation for their simulation, live events, virtual reality and post-production projector lines. We aren’t sure about UniSee but with the marketing behind that product, it will be unlikely that’ll slow down.
- Speaking of ClickShare, it’s likely many in the company now regret bringing the WePresent brand inside the company. They should have kept it a separate brand targeting education installs. But, the combination of ClickShare and WePresent has caused confusion in the channel. This will likely be addressed too.
There’s no question that Barco is filled with very smart people. Their CEO, Jan De Witte, is brilliant and with people like Inge Govaerts running PR, they will no-doubt be successful. But 2019 will be a year of change for Barco and I suspect what will emerge will be a leaner, more competitive company with a higher-volume product line.
Barco is here.