Software vendor i2 mulls job cuts due to weak results

Supply-chain and business-to-business software vendor i2 Technologies Inc. today disclosed that it may lay off up to 10% of its 6,100-plus employees because of lower-than-expected financial results in the just-finished first quarter.

Dallas-based i2 said it's also re-examining its business outlook for this year as a whole in the wake of the first-quarter showing. Revenue for the quarter is expected to increase 91% compared to the same period last year, but i2 CEO Sanjiv Sidhu said some of the company's users "are delaying purchasing decisions due to uncertainties about the economy."

In a statement as part of today's announcement, Sidhu added only that "a fair number" of users had chosen i2's software during the first quarter. The big revenue increase, from $186 million in last year's quarter to an expected $355 million in the latest three-month period, is resulting partly from a series of acquisitions that i2 has made within the past nine months.

The company said its first-quarter profit is now expected to come in at about $8.1 million on a pro forma basis that excludes acquisition-related costs and other special expenses. That's just half of what i2 earned in last year's first quarter on a similar pro forma basis.

Bill Beecher, i2's chief financial officer, said the company's previous business forecast for this year "was based on the extremely high demand we saw last year." But given the softening of the U.S. economy and the resulting decrease in expected revenue, he added, i2 now plans to reduce its costs by 5% to 10% through the upcoming workforce reduction and other steps.

Copyright © 2001 IDG Communications, Inc.

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