Siebel is set to slash up to 1000 jobs from its headcount in a bid to get operating margins back on track as the comnpany warned that revenues declined a further 18 per cent in the second quarter.
Siebel's second-quarter sales will be $330 million to $334 million, below the company's target of $340 million to $360 million and 18 per cent less than the $405.6 million for the same period of 2002. Profit will be about 2 cents per share, at the bottom end of forecasts. Sales of software licenses, Siebel Systems' main business, are now expected to be $110 million, down 17 percent from $132 million in the second quarter last year.
"Given that it does not appear that the economy is picking up, we are in the process of reworking our operating plan for the remainder of 2003 and 2004, " said CEO Tom Siebel. "We'll be eliminating a layer of management and some unprofitable business operations.?
Analysts estimate that in order to get operating margin up to the desired 15 per cent mark, between 500 and 1000 jobs will have to go from the current 5,589 strong headcount. Siebel has already laid off about 1,600 employees in the past year. Further information on Siebel?s intentions will come when the company releases its full earnings report on 22 July.
Siebel also blamed the Oracle/PeopleSoft takeover battle as causing uncertainty in the market. "There's no question this activity raised uncertainty and fear in the minds of buyers of software, and it had an effect across the industry of encouraging customers to defer decisions further,'' he said. ?Overall the business environment for information technology remains weak. Global economic conditions continue to be our biggest challenge due to the uncertainty of our customers about their own businesses.''