Medical imaging software and services company Merge Healthcare yesterday announced its plans to reduce 28 percent of its current workforce, including 45 jobs in North America and Canada.

Labeled under a "rightsizing initiative," the company also will eliminate 115 offshore positions, with most of the layoffs effective immediately. Additionally, it expects to lose 20 more people from anticipated attrition, which would bring the total up to 180 staffers reduced.

According to the company, there will be a $2 million charge in its financial statements for the first quarter due to approximately $1.3 million in severance costs and $0.7 million in other costs stemming from legal fees and future lease payments on its now completely vacated Burlington, Mass., office. The estimated annual cost savings of these actions is approximately $7.0 million, while terminations that have occurred prior to today’s announcement aggregate about $3 million in annual cost savings. Merge Healthcare anticipates an additional $1 to $2 million of savings based on historical attrition.

CEO and President Ken Rardin said the Deficit Reduction Act, two financial statement restatements, and ongoing legal expenses associated with litigation and the SEC investigation brought about the company’s decision.

"We are making changes to our cost structure with the intention of enabling our company to focus on our core business and return to positive operating results," he said.