Management software maker BMC will can almost 12 per cent of its workforce in a bid to please investors with improved profitability. In addition, the company revealed preliminary fourth quarter financial figures well below previous expectations.
BMC provided word of the firings on Monday, saying between 825 and 875 staffers (out of 7,000) will be let go. A large chunk of the job cuts will come from BMC's sales support and sales management units. The Houston-based company expects to save $100m by making these moves. The extra money will be used to fund work in "growth areas" such as service management and to bolster BMC's bottom line.
"We have realigned to increase investment in our service management growth business, maintain profitability in our mainframe business and make the necessary reductions to improve profitability in our distributed systems management business," said Bob Beauchamp, president and CEO at BMC.
BMC's hand was forced by a disappointing fourth quarter. Its preliminary revenue range for the period has been reduced to between $388m and $400m from a range of $410m and $425m provided in February. The company expects to post anywhere from a 1 penny loss to a 3 cent per share gain in the fourth quarter.
Soft sales of Windows and Unix management products along with a falloff in German sales were blamed for the revenue shortfall. In addition, BMC failed to close four significant contracts before the quarter end.
BMC has been on quite the buying spree in recent months, spending hundreds of millions to pick up the likes of Marimba, Calendra and OpenNetwork. ®
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