SAN FRANCISCO (06/08/2000) - Corel Corp. announced today that it will cut its workforce by around 21 percent in order to reduce costs. The action is part of an ongoing plan by the troubled Canadian software vendor to save US$40 million through cost cutting measures.
Corel will cut around 320 jobs worldwide, with the bulk of them from the company's headquarters in Ottawa, a company spokeswoman said. The job cuts will affect the company across the board, and will consist of "employee terminations, termination of contractors and attrition," she said.
Corel Chief Executive Officer and President Michael Cowpland has agreed to forego his salary for an unspecified period as part of the cost cutting efforts. Cowpland's annual salary last year was US$199,000, according to the Corel spokeswoman. She was not aware if other Corel senior executives will follow the CEO's example.
"This was not an easy decision to make," Cowpland said in a Corel statement issued today. "After much careful deliberation, the company concluded that these steps were necessary."
The Canadian vendor is currently in a quiet period leading up to the release of the company's second-quarter financial results, which are due to appear during the week of June 19. This effectively means that Corel is barred from making any in-depth comments about its cost savings plan.
Late last month, Corel announced some much-needed extra financing with a C$15 million (US$9.98 million) agreement with Canaccord Capital Corp. At the same time, the software vendor revealed that two of its senior executives were leaving the company. [See "Corel Gains Extra Financing, Loses Key Staff," May 25.]In an April filing with the U.S. Securities and Exchange Commission (SEC), Corel said it could run out of cash in 90 days if its planned merger with U.S. development tools vendor Inprise/Borland Corp. didn't proceed. Corel and Inprise/Borland in mid-May decided to terminate their merger, leaving the Canadian vendor's financial future uncertain.
Corel's stock closed today on the Nasdaq exchange at US$5.03, down 4.2 percent on yesterday's end of trading.
Corel, in Ottawa, Canada can be reached at +1-613-728-8200, or via the Web at http://www.corel.com/.