Only a few months after quietly reducing its workforce, iCad is laying off yet another group of employees.
iCad, based in New Hampshire, is developing imaging and radiotherapy technologies to improve breast, prostate, and colorectal cancer detection and treatment, led by its artificial intelligence-powered 3D mammography software.
The company announced in a filing with the US Securities and Exchange Commission on Friday that it had implemented a restructuring plan earlier in the week that included layoffs of “approximately 23 employees,” affecting approximately 28% of its workforce. The majority of those laid off will be from iCad’s detection business unit; the company is divided into two main divisions: detection and therapy.
The layoffs will cost iCad approximately $300,000 in one-time severance and benefits payments, as well as employee transition costs. This charge is expected to hit the company’s bottom line in the first half of this year, though the company noted in the filing that it “may incur additional costs during the remainder of 2023.”
Meanwhile, according to the filing, iCad subsidiary Xoft, which manufactures a miniaturized radiotherapy device, plans to lay off 12 of its own employees, accounting for half of its workforce.
iCad did not respond to a request for more information.
Though iCad has yet to release its financial results for the fourth quarter and full year 2022 (the release is currently scheduled for Tuesday afternoon), it issued a preview earlier this month estimating fourth-quarter revenues of $6.5 million, a decrease of more than 16% from the final quarter of 2021 when it earned $7.8 million in revenues (PDF).
Throughout 2022, the company forecasted similar declines. iCad reported (PDF) total revenues of just under $21.5 million for the first nine months of the year, nearly 17% less than the $25.8 million earned in the first three quarters of 2021.
Those results came as iCad spent 2022 changing its business model, moving away from selling perpetual licenses of its software and instead selling subscriptions to the technology. According to CEO Stacey Stevens, the change is expected to save the company more than $3 million in expenses per year.
The company also emphasized the success of the new recurring-revenue model, noting in the release that subscription sales in the third quarter alone had surpassed those in the first half of the year.
Despite this optimism, iCad has recently made several potentially cost-cutting moves. Stevens stated in an early November conference call discussing the third-quarter results that the company had reduced its headcount by approximately 17% compared to the beginning of the year.
According to the CEO, the reduction was split between the company’s decision not to fill open positions and a round of layoffs implemented in the week preceding the call.
In addition, iCad disclosed earlier this month in a preview of its fourth-quarter results that it has hired investment bankers to help “explore strategic options” for its therapy division.