Arguments

Can you please explain the argument made by the person in this letter attached.
Mid-year number continue to pressure us from all sides in spite of last year's tremendous cost-cutting sacrifice of nearly 500 employees and revamping of our support chain management system, which cut costs by almost 15%. Project revenues continue to fall in this economy, with both sales and service revenues sinking. Based on recent numbers, the present sales/services ration of 50.50 will slide about 30% with services expected to provide about 70% of our revenues during the rest of this fiscal year.

Based on this extreme situation, we are taking extreme action. As you know Pat Lambert recently joined AcuScan as the company's new Director of Marketing. Pat's history as a talented and creative marketing force within the cereal industry will prove to be a boon to our place in the market. Pat and Chris Marinas, our VP of Product Development, are now working on a new venture that we will launch by the end of the year. This is a new kind of project for us at AcuScan, as we have not developed a new product or market since the inception of the company. However, with Pat's creativity and Chris's expertise, I'm confident that we will recapture our position as a market leader with our technology.

However, before the new product emerges, we still face a short-term budget crisis. Accordingly, and after significant analysis with senior management, we are asking that every department (except Sales and Marketing, our key revenue generators) find ways to reduce budgets by 15% in the coming quarter. I recognize that on top of last year's staff reduction's this is a heavy burden. But I'm confident that we can do this by evaluation every expenditure across the board. I'm leaving the decision of how to reach a 15% budget cut to you, who know your people and your possibilities better than anyone the company.

My door as always is open to discuss the ramifications of this budget reduction for the coming year. If you have any concerns, please see me directly.