Customer service software maker Siebel Systems Inc. reported second-quarter earnings Wednesday that fell short of Wall Street expectations and announced that it would cut its staff by nearly 1,200 to weather the dreary market for its software.
For the second quarter ended June 30, Siebel reported revenue of US$405.6 million, down about 28 percent from the second quarter 2001 when the company reported revenue of $560.2 million, Siebel said in a statement.
Net income fell by about 61 percent to $29.8 million, or $0.06 per share, compared with $76.6 million, or $0.15 per share in the same quarter a year ago.
Analysts had expected Siebel, in San Mateo, California, to report a profit of $0.09 per share on revenue of $437.1 million, according to a survey of analysts polled by financial research company Thomson Financial/First Call.
In a conference call with reporters and analysts, Chief Financial Officer Ken Goldman announced a reduction of nearly 1,200 jobs, reducing its work force to about 6,000 employees. Siebel will reinstate bonus programs and merit increases for its remaining employees, he said.
Additionally, the company will close some excess facilities and consolidate each of its IT, marketing and sales divisions, he said. Those reorganization efforts, combined with the layoffs, will bring a charge to the company's third-quarter earnings of between $200 million and $250 million, the company said.
"It is difficult to express how weak (the market) is. In Europe, in Asia and in the United states we can see that technology vendors are not really making any significant sales (and) companies are not spending," Tom Siebel, the company's chief executive officer, said in the conference call, which was also broadcast on the Web. "There is just not a lot of business being done in the information technology market ... there does not appear to be any improvement in the medium-term."
In after hours trading, shares of Siebel (SEBL) had fallen $1.13, or 9.93 percent, to $10.25, at about 8 p.m. ET, according to the Island trading network.