Siebel: layoffs, steady earnings, new product

Heavyweight CRM (customer relationship management) vendor Siebel Systems Inc. on Wednesday announced quarterly earnings that were one cent higher than Wall Street expectations.

Nevertheless, CEO Tom Siebel said the San Mateo, Calif. company this week laid off 10 percent of its employees, twice the amount the company usually trims from the bottom of its work force.

For the fiscal quarter that ended March 30, Siebel reported revenues of $588.7 million, up from $319.7 million for the same quarter last year. License revenue was $335.1 million, compared to $195.5 million in the previous year's quarter. Services revenue totaled $253.6 million, up from the previous year's $124.2 million. The results were one cent above expectations set by Wall Street analysts polled by First Call.

In a teleconference with press and analysts, Siebel said his company's leadership role in the CRM market was the key factor in its success at a time when competitors are reporting shortfalls.

"It was our belief that when the market turned, the company that was the market leader would be able to continue a cash-positive run," Siebel said. "Now we're in an area of rapid consolidation, but we think we're in a position to strengthen our market position this year."

Declaring the current financial downturn a "recession" that has created a very "soft" CRM market, Siebel predicted that "of the 80 companies we compete with ... 60 will not survive the year."

"I have enormous respect for any company that did not miss its numbers last quarter," Siebel said.

Siebel released its earnings after announcing earlier Wednesday that it would shut down Sales.com, its Web-based sales-force automation service, at the end of June. That move was expected, according to Meta Group Inc. analyst Steve Bonadio, who predicted that other, smaller business service companies, such as Salesforce.com, would face rough financial waters this year.

"Many of them only have six to 12 months left," Bonadio said.

Siebel also announced a new ERM (employee relationship management) product that will enable companies to track workers' issues and ensure that their work forces are focused on company objectives.

The out-of-the-box application includes Web-based training, personal employee home pages, company news and events, information on products and competitors, performance management, and other features.

Siebel also said the next version of the company's flagship CRM suite, Siebel 2001, will be released in late summer or fall.

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