Digi International, the Minnetonka-based provider of internet of things connectivity products for business, will cut 10 percent of its workforce as it shifts work done in its Eden Prairie plant to contract manufacturers.
“Digi manufacturers approximately 85 percent of its products through contract manufacturers,” Ron Konezny, the company’s president and CEO, said in a statement. “Moving the remaining portion to existing providers minimizes disruption.”
Sixty positions (out of a workforce of about 600) will be eliminated in the next 120 days. The company said when possible it will seek to find new positions for the affected employees.
Digi’s shift to contract manufacturers is common in the industry, the company said, and will allow it to focus on new product introduction. The Eden Prairie facility will continue to house its operations team, support its contract manufacturers and oversee the planning and procurement of finished goods.
Konezny has been leading a turnaround of the company since he was hired in December 2014. In October 2015, Digi sold an underperforming subsidiary, and the company fought off a November 2016 takeover bid from St. Louis-based Belden Inc.
Shares of Digi International closed Tuesday at $10.25, up 5 cents. The shares are up 6.5 percent year-to-date.