Shares in Promethean World lost a third of their value, after the whiteboard firm issued a profits warning.
EducationInvestor understands that the firm is now looking at making a number of redundancies within its struggling US business, in an attempt to control its costs.
Promethean is struggling with a shortfall in revenues driven by a collapse in US and European schools’ spending.
In a trading update issued on Friday, the board warned that it expected market conditions to "remain challenging, particularly in the US and Europe". It noted that the high levels of orders expected in the US in late June had not materialised.
It thus predicted its revenues for the first half of the year year to be in the range of £80-85 million – below the consensus estimates of £100 million – and for gross margins to be lower than last year.
It predicted an operating loss of between £1 million and £10 million, with the consensus among analysts putting it at around £7 million (2011: £8.2 million profit)
On the back of the news Promethean's share price tumbled from around 35 pence per share to less than 25 pence. At the time of its flotation in March 2010 they were worth 200 pence.