BMC cuts 900 jobs
Trying to staunch red ink
Software maker BMC said today it is to slash 900 jobs globally in an effort to stem losses.
The company, which makes software products that monitor traffic on mainframe and networked computer systems, said that it will cut about 13 per cent of its global workforce and is planning facility closures and office consolidations to save about $30 million in costs per quarter. The company expects to take a $60 million once-off charge for the cuts.
"Although we fully expect the IT spending environment to remain challenging, we are confident that our restructuring actions will allow us to improve our profitability in the second half of our fiscal year," said Bob Beauchamp, president and CEO.
Investors were pleased with BMC's announcement and the company's shares rose $0.20, or 1.5 percent, to $13.90 in early morning trading on the New York Stock Exchange.
Part of this rise however could be attributed to the company's results, which beat recently lowered expectations. The software maker posted a loss of $6.1 million, or $0.03 a share, in its fiscal first quarter, compared with earnings of $5.2 million, or $0.02 a share a year ago. Excluding once-off charges and gains, the firm had a profit of $0.03 per share and along these lines, the company beat the forecasts on Wall Street of earnings of about $0.02 per share.
Revenue rose 2 per cent to $310 million from $305.2 million a year ago as revenue from maintenance contracts and professional services climbed 23 per cent and 4 per cent respectively. But a 21 per cent drop in licence revenue cut into these gains.
Looking forward, BMC expects second-quarter earnings excluding items of $0.04 to $0.06 per share, behind the $0.07 predictions analysts currently expect, according to Thomson First Call. BMC did however say that it expected earnings of $0.46 per share for the full year, which is in line with market forecasts.
About 90 people are employed at BMC Ireland, where the company recently added 20 jobs. Brendan O'Reilly, the country manager for BMC Ireland, was unable to rule out cuts entirely, but said he would be "very surprised" if the group decided to cut any of its Irish workforce.