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SPSS to axe 10% of workforce

13th Nov 2008
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More bad news from the industry, as analytics firm SPPS announces redundancies in the face of a "very challenging economic environment".


By Stuart Lauchlan, news and analysis editor

SPSS is planning a 10% headcount reduction despite reporting third quarter revenues up 4% vs Q3 2007 to $74.9m and net income up 25% to $10.5m.

“In the face of a very challenging economic environment we met our revenue and earnings expectations for the quarter,” said CEO Jack Noonan. “As larger transactions became more difficult to close we were able to offset this by focusing on smaller ones. In fact we closed 11% more transactions and sales under $25,000 in the quarter.

"We also saw a good uptick in sales from SPSS Statistics 17.0 which was released midway through the quarter to good customer reception. The operational actions we’ve taken along with our go-to-market strategy should give us a solid foundation moving forward. We can’t change the current economic slowdown but we can execute effectively through it,” he added.

Photo of Jack Noonan"The worst thing you can do within an organisation is continue to trickle a reduction or cost cutting out. You get it over with, get it done and move forward."

Jack Noonan, SPSS

“It’s an absolute unknown and the worst thing you can do within an organisation is continue to trickle a reduction or cost cutting out. You get it over with, get it done and move forward and it’d be great if we cut too far and had to hire tomorrow, but I don’t see it on the horizon.”

Like every other firm in the industry, SPSS was taken by surprise by the tumultuous economic meltdown that occurred in September. “Things like that are things you just can’t count on,” said Noonan. “What we see going forward is more of an unknown. We’ve got a solid pipeline against the number that we’ve given you but who knows what’s going to happen post-Election, who has any idea what’s going to happen with the economy? We look at our upside in growth in the future is our larger transactions with our deployment solutions sold into IT.

“We know that across the board IT organisations are expecting to cut budgets next year. The great part of our offering is we have our smaller-sized deals that well into line of business guys. We’ve been able to continue and pass downturns to manage significantly better than most of the software market, the enterprise software market specifically. But we also know that during the downturn and the dot com bust when IT budgets were cut substantially they were cut on basic 'block and tackle' offerings to spend some more money on things that would change the business.

"We believe we are a thing that changes the business and we literally don’t know what to expect. We know IT budgets are going to be cut, we also know we’ve got a loyal customer base and that our line of business folks that buy in downturns. This is a big unknown for everybody.”

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