blueoval01
07-17-2002, 02:38 PM
I2 Technologies Inc. will slash its workforce by 30 percent as part of a bid to reverse persistent quarterly losses, the Farmers Branch-based software maker said Tuesday.
The cuts will affect 1,400 employees throughout the company, though they will be less severe for workers involved with customer service and support, said Sanjiv Sidhu, chairman and chief executive. I2 employs about 1,300 people in the Dallas area. Mr. Sidhu said about 30 percent of the local workforce would be affected, proportional with the rest of the company.
Staff reductions will begin next week, and continue over the next few quarters, the company said. I2 had said on July 2 that it would have to eliminate an unspecified number of its 4,800 jobs to bring its expenses closer in line with a smaller revenue base. The company also warned then that it would report dramatically lower sales for the second quarter.
"I believe that i2ers hate to see other i2ers leave," Mr. Sidhu said in an interview. "It's extremely hard. On the other hand, they understand it needs to be done."
The final quarterly results released Tuesday were in line with i2's guidance from two weeks ago. For the quarter, i2 lost $757.4 million, or $1.77 per share, on revenue of $119.6 million. In the same period last year, i2 lost $860.9 million, or $2.08 per share, on revenue of $249.2 million.
The company also said it expects to report a restructuring charge of more than $50 million in the current quarter to cover severance payments, the closing of certain facilities and other related costs. Overall, i2 said it wants to reduce its operating costs by at least 30 percent by the end of this year.
I2 has consistently blamed its troubles on lower corporate budgets for technology spending. The company has made deep staff cuts before, eliminating more than 2,000 positions last year.
Now, i2's challenge will be to do a better job convincing customers that its software should be a higher priority, Mr. Sidhu said.
I2's highest priorities will be returning to profitability and to focus more intensely on its customers, officials said.
"To some degree we are moving i2 back in time to resemble the smaller but more nimble company of some years ago," said Bill Beecher, executive vice president and chief financial officer, in a conference call with analysts.
The company also will be stepping up its efforts to develop software in India, where technology businesses enjoy a significant cost advantage for labor. Mr. Sidhu described the company's extensive operations in India as a competitive advantage.
I2 has often been rumored to be an acquisition candidate, but Mr. Sidhu said in the interview that i2 has the potential to be one of the world's biggest makers of applications software. "At one time, Oracle almost went out of business," he said.
Shares in i2 rose 8 cents to close at $1.38 before the financial results were released, and were little changed in after-hours trading. The stock is off 91 percent over the last year. The issue traded as high as a split-adjusted $111.75 at the peak of the dot-com frenzy in early 2000.
The cuts will affect 1,400 employees throughout the company, though they will be less severe for workers involved with customer service and support, said Sanjiv Sidhu, chairman and chief executive. I2 employs about 1,300 people in the Dallas area. Mr. Sidhu said about 30 percent of the local workforce would be affected, proportional with the rest of the company.
Staff reductions will begin next week, and continue over the next few quarters, the company said. I2 had said on July 2 that it would have to eliminate an unspecified number of its 4,800 jobs to bring its expenses closer in line with a smaller revenue base. The company also warned then that it would report dramatically lower sales for the second quarter.
"I believe that i2ers hate to see other i2ers leave," Mr. Sidhu said in an interview. "It's extremely hard. On the other hand, they understand it needs to be done."
The final quarterly results released Tuesday were in line with i2's guidance from two weeks ago. For the quarter, i2 lost $757.4 million, or $1.77 per share, on revenue of $119.6 million. In the same period last year, i2 lost $860.9 million, or $2.08 per share, on revenue of $249.2 million.
The company also said it expects to report a restructuring charge of more than $50 million in the current quarter to cover severance payments, the closing of certain facilities and other related costs. Overall, i2 said it wants to reduce its operating costs by at least 30 percent by the end of this year.
I2 has consistently blamed its troubles on lower corporate budgets for technology spending. The company has made deep staff cuts before, eliminating more than 2,000 positions last year.
Now, i2's challenge will be to do a better job convincing customers that its software should be a higher priority, Mr. Sidhu said.
I2's highest priorities will be returning to profitability and to focus more intensely on its customers, officials said.
"To some degree we are moving i2 back in time to resemble the smaller but more nimble company of some years ago," said Bill Beecher, executive vice president and chief financial officer, in a conference call with analysts.
The company also will be stepping up its efforts to develop software in India, where technology businesses enjoy a significant cost advantage for labor. Mr. Sidhu described the company's extensive operations in India as a competitive advantage.
I2 has often been rumored to be an acquisition candidate, but Mr. Sidhu said in the interview that i2 has the potential to be one of the world's biggest makers of applications software. "At one time, Oracle almost went out of business," he said.
Shares in i2 rose 8 cents to close at $1.38 before the financial results were released, and were little changed in after-hours trading. The stock is off 91 percent over the last year. The issue traded as high as a split-adjusted $111.75 at the peak of the dot-com frenzy in early 2000.