Siebel has reported a 67 per cent drop in second-quarter earnings and axed 9 per cent of its global workforce with little expectation that prospects will improve any time soon.
Siebel reported net income of $9.8 million, compared with year-earlier earnings of $29.8 million. Revenue fell 18 per cent to $333.3 million from $405.6 million a year earlier, the eighth straight quarter of year-over-year sales declines. Revenue from licence fees for the second quarter were $109.9 million, down from $170.1 million the previous year while revenue from maintenance, consulting and other services were $223.4 million .
After eliminating 1,600 employees over the past twelve months, the company is now cutting an additional 490 jobs. It will also close some offices and ship some operations outside the US in a bid to cut $30 million in operating costs by year's end.
"The market is quite soft," CEO Tom Siebel said. "We have seen a long, dry spell. There have been many predictions of that recovery in the past 24 months. We just haven't seen it yet.” He added that the company expected sales to remain about the same for the next 18 months.
He again cited the ongoing hostile takeover bid for PeopleSoft by Oracle as a contributing factor to the poor results. “It did have an effect,'' he said. ``It was negative, and I'm not able to quantify it.''
Siebel also has been sparring with some investors upset about huge stock option windfalls company managers including Siebel himself have pocketed while the shareprice has collapsed, while a shareholder suit to be heard in November alleges Siebel's board awarded many of the stock options improperly.