Openwaves goodbye to 180 jobs
Mobile software developer, Openwave Systems, is to cut 180 jobs. The US company said on Thursday that it was making the lay-offs, which amount to around 12 percent of its workforce, as part of an attempt to reduce its expenses.
Openwave said the 180 lay-offs will reduce its quarterly costs by about USD10 million within the next two to three quarters, starting with the first quarter ending 30 September. It said the move would also cut its operating expenses and help it achieve EBITDA (earnings before interest, taxes, depreciation and amortisation) breakeven. It will book a charge of around USD8 million to USD14 million relating to these reductions, which will be split between the fourth quarter of fiscal 2003 and the first quarter of next year.
Last September, Openwave said it would reduce staff number by around 25 percent, or 1,900 workers at the time, at a cost of between USD75 million to USD90 million.
The company pointed out that the latest cost reductions include the elimination of some people that were involved in a lucrative development and porting project.
The project had been contributing around USD5 million a quarter in project revenue. Openwave said that the majority of the development and porting of the project was complete and the focus was now on sales and marketing. As a result, Openwave's project revenue will fall by USD2 million a quarter, plus or minus 15 percent, starting in the quarter ended September 30.
The company's latest results for the quarter ended 31 March 2003 showed revenues down year-on-year by nearly USD20 million. In Q3 2002, revenues were USD63.5 million, compared to USD83.2 million in the same quarter a year ago.
Don Listwin, president and chief executive officer of Openwave, said the company remained "cautiously optimistic" that operators will continue to focus on mobile data and services. He added that the cost reductions would allow the company to achieve its financial and operating goals.
Openwave employs around 100 people at its Belfast facility. The company said that for now it was not going to give a specific breakdown of where jobs would be lost across regions or production divisions. However, it is thought that the majority of the lay-offs will be in its Americas operations. In December 2001, the firm cut 30 jobs in Belfast.
In common with many other publicly quoted technology firms, Openwave's shares have gone into free-fall since 2000. At that time, Openwave stock hovered at around the USD250 mark, but at the end of trading on Thursday on the Nasdaq, the firm's shares were trading at USD2.24.
Openwave claims to be the world's largest provider of mobile Internet software. Its main business is the provision of communications software to wireless and wireline carriers, ISPs, portals and broadband providers. Customers include AT&T Wireless, Nextel and Sprint PCS. Its Mobile Browser product is embedded in more than 70 percent of all Internet-enabled phones, according to the company.
Openwave was formed by the merger between Phone.com and Software.com in 2000. The office in Belfast was called Apion until 1999, when it was acquired by Phone.com. © ENN
Sponsored: Today’s most dangerous security threats