- Uniform manufacturer, Unisync Corp (TSX:UNI) is temporality laying off 112 of its staff, effective from today
- This is due to a corresponding 60 per cent expected reduction in third quarter revenue, caused largely by the effects of the COVID-19 pandemic
- The company is expecting to receive government assistance to offset the salaries of its remaining staff
- The company revenue reduction has been most pronounced its airline, hospitality and gaming contracts
- Unisync Corp (UNI) is down 5.45 per cent, with shares trading at C$1.56 and a market cap of $29.1 million
Uniform manufacturer, Unisync Corp (TSX:UNI) is temporarily laying off 60 per cent of its staff, due to COVID-19’s ongoing economic impact.
The decision is effective from today and will affect 112 employees.
The company has been heavily impacted by the airline industry’s recent downturn. Unisync managed and produced uniforms for Air Canada and WestJet.
The value of both these contracts has been affected by the rampant layoffs and flight cancellations from both companies.
A similar impact is being felt from the hospitality and gaming industries, where staff reductions are impacting the demand for uniforms.
As a result, the company is expecting its third quarter revenue to be up to 60 per cent less than the previous corresponding quarter. This dramatic reduction in revenue has caused the wide-spread layoffs.
Through government assistance, Unisyc is expecting to receive up to 75 per cent of the remaining staff’s salaries. This assistance will pay is up to $44,000 per individual and will offset some of the company’s cash flow issues.
Before the outbreak began, Unisync had hoped to meet its $100 million in revenue milestone before the end of the fiscal year.
However, the expected third quarter performance, paired with the undeterminable length of the pandemic’s effects, leaves the company’s 2020 performance unclear.
Unisync is hoping a number of public sector contracts will remain stable and help to offset the reductions in other sectors. The company noted that its drug store and grocery contracts are also continuing to perform well.
Furthermore, Unisyc’s Peerless Operations, who provide protective clothing and specialised military garments to federal and state agencies, is continuing to perform well.
The company does not expect Peerless Operations to underperform in the coming quarters and should not need to apply for any government assistance.
Unisync Corp (UNI) is down 5.45 per cent, with shares trading for $1.56 at 10:14am EST.