PeopleSoft cuts jobs, closes facility

PeopleSoft Inc. plans to cut 200 jobs worldwide and close its Santa Clara, Calif., office in response to bad economic times, the enterprise software maker said Tuesday.

Only internal administrative and support functions are anticipated to be cut, sparing customers from any negative effects of the “cost measures,” said Steve Swasey, a PeopleSoft spokesperson.

“We are not anticipating research and development, consulting or sales headcount reductions,” he said. “The focus will be as it always is, on customer satisfaction and customer growth.”

The employees in PeopleSoft’s Santa Clara office, currently about 100, will move to PeopleSoft’s Pleasanton, Calif., headquarters within the second quarter, Swasey said.

PeopleSoft expects to take a US$12 million charge in the second quarter for this restructuring, one of the first large cost-cutting actions by the software maker in a time in which many vendors are tightening their belts amid lower corporate spending on IT.

PeopleSoft employed 8,180 people worldwide as of March 31, compared with 8,293 at the end of 2002. The company on Tuesday reported net income for the first quarter of 2003 of US$38.5 million, down from US$44.5 million in the same period last year. Revenue dropped to US$460.3 million from US$483.3 million. License fees took a big hit, tumbling to US$80.8 million in the first three months of 2003 from US$133.3 million in the first quarter of last year. Maintenance and professional services revenue was up, evening out the overall revenue picture.

Peoplesoft’s Canadian headquarters is located in Toronto. The company also has offices in Calgary, Edomonton, Vancouver, Montreal and Ottawa. It is not known if these locations will be affected by the job reductions.

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