CA profits crash
Business software giant CA is to cull 1,700 of its workforce. News of the massive restructure came as the firm released its Q1 2007 results and reported a 64 per cent drop in net income compared to the same period in 2006.
About half the cull will take place in North America, with the rest drawn from global operations. In all, 10.5 per cent of CA staffers are for the chop. Execs hope the plan, which is to be completed in 2008, will save the firm $200m annually. The redundancies themselves will cost the firm $200m.
Revenues were actually up slightly on the same period last year, rising from $927m to $956m, but net income sank to $35m, delivering GAAP earnings per share of $0.06, although they topped analyst estimates of $0.03. CA made a loss of $36m in Q4 2006.
CEO John Swainson, the man tasked with hauling the company back from years of accounting scandals, losses, top execs admitting fraud, and a revolving boardroom door, said: "We are not satisfied with our cost structure and we are implementing an expense reduction plan to improve the company’s efficiency and competitive position. These are the first steps in a long-term program to achieve a best-of-breed cost structure."
CA did not update its annual revenue forecast of $3.9bn, made on 29 June, but expects to do so when it reports its Q2 numbers. ®