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The company has withdrawn its growth targets for 2009 following a fallow Christmas period. The company says it will revise the targets later this month, but will shed around 1,000 jobs in the meantime.

"During the December quarter, the retail environment deteriorated significantly," claims Gerald P. Quindlen, Logitech's president and CEO.

"We experienced varying degrees of weakness across all geographies and channels as our customers reduced inventory levels in the face of weaker consumer demand.

"Moreover,

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we expect the economic environment to worsen in the coming months and we are therefore taking significant actions to align our cost structure with what is likely to be an extended downturn."

Logitech has long been a rumoured takeover target for Microsoft and the company's latest troubles will undoubtedly have rekindled interest in Redmond. The company's share price has tumbled by around 10% on the back of the withdrawn growth target, leaving its shares at below half the value they were at the beginning of 2008.

However, Logitech says it remains confident of riding out the storm. "We have a strong cash position, no debt, and we continue to maintain market share across multiple segments and geographies," Quindlen claims.

"We remain confident in our strategy for driving long-term double-digit growth and we believe the well-considered actions we're taking now will result in an even stronger Logitech when the economic recovery begins."