Informix Corp., which last month replaced its CEO after second-quarter revenues and profits came in below expectations, yesterday announced a series of management and organizational changes that include the elimination of about 500 jobs.
The layoffs will reduce Informix's 4,300-employee workforce by 12%, although a company spokesman said the struggling vendor of databases and data analysis software also plans to hire 100 or more new employees to fill open positions in its sales and sales support operations. That ultimately would leave Menlo Park, Calif.-based Informix with between 3,900 and 4,000 employees, he said.
Pete Fiore, who was named senior vice president of a new business unit that will be responsible for Informix's nondatabase products, said the company needs to cut employees to prevent "redundancies" and to enable it "to invest more in future growth and [in satisfying] current customers." Most of the employees being let go work in finance, marketing and other administrative departments, Fiore said.
As part of the restructuring, Informix also is consolidating what had been five separate business units into two: the one headed by Fiore and a database group that will be run by Jim Foy, another senior vice president at the company. The streamlined structure is aimed at better focusing the company's development, marketing and sales activities, Informix said.
The move also gives greater control of the company to executives who joined Informix through a March acquisition of Ardent Software Inc., a data warehousing vendor that was based in Westborough, Mass. Fiore and Foy both worked at Ardent, as did Peter Gyenes, who was named CEO of Informix last month after the company's board ousted predecessor Jean-Yves Dexmier.
In addition to the two consolidated business units, Informix said it also plans to create a worldwide services group that will support its field sales operation and be responsible for corporate strategies related to things such as product maintenance, customer support, consulting and training.
The company -- which saw its second-quarter profits drop from $22 million a year ago to $4.9 million in the just-finished period -- expects the restructuring to reduce its annual costs by up to $80 million. In a statement, Gyenes said executives "believe that Informix is in an excellent position to achieve significant operating leverage over the intermediate term as we accelerate revenue growth and increase company-wide efficiencies."But in the more immediate future, Informix plans to take a charge ranging from $75 million to $90 million against its third-quarter financial results in order to pay for the layoffs and some related facility closings. Additional charges amounting to another $10 million to $15 million will follow during a transition period that will last until the middle of next year, the company said.