BELLEVUE, WA -- Outerwall Inc. said the president of its Redbox video rental vending business has left the division after just more than a year and that it plans to cut 8% of its workforce. The company, formerly known as Coinstar, has given no reason for Anne Saunders' leaving, but said it will fill the position in the coming months.
Separately, Outerwall said it will discontinue three of its new ventures -- Rubi coffee kiosks, Crisp Market food kiosks and Star Studio photobooths.
Outerwall said eliminating 251 jobs was projected to save the company about $22 million annually, beginning in 2014. The company expects to take a pretax charge of about $5 million in the fourth quarter related to the job cuts.
Redbox represents more than 80% of Outerwall's revenue. The division operates some 43,700 self-service movie and videogame rental machines. Customers can also purchase movies and games. It competes mainly with Netflix Inc.
Outerwall, when it was Coinstar, announced in June 2012 that it planned to roll out Rubi kiosks to sell Starbucks Corp's Seattle's Best Coffee. The coffee kiosk looks like a standard 6-ft. tall vending machine and was targeted at grocery, drug and mass merchant retail channels, the same locations where Coinstar counters and Redbox are placed.
Outerwall said the wind-down process for Rubi and other ventures is expected to be complete by the end of the first quarter of 2014. It said it will continue to invest in the rollout of ecoATM and make a limited investment in its SAMPLEit concept.
"These actions are consistent with the plans we outlined earlier this year and ensure that Outerwall's operations drive enhanced value creation for both our shareholders and retail partners," said Outerwall chief executive J. Scott Di Valerio.
Outerwall said it would take a one-time pretax charge of $26 million to $29 million in the fourth quarter related to the discontinuation of these ventures. The company also raised its full-year adjusted earnings forecast to $5.44 to $5.59 a share from $4.89 to $5.04. Analysts were expecting $4.85 per share, according to Thomson Reuters.