CRM vendor slashes workforce

Looking to reduce its expenses, customer relationship management (CRM) software vendor Pegasystems Inc. Tuesday announced plans to cut its workforce by 13 per cent and warned that fourth-quarter sales will likely come in below expectations.

The Cambridge, Mass.-based maker of rules-based CRM applications for use on the Web and in call centers said revenue in the just-ended fourth quarter will be down about 20 per cent from the US$22.7 million that it reported in the third quarter. Pegasystems attributed the drop off to delays in the sales of “several” software licenses that it had counted on for the fourth quarter.

In an effort to reduce its annual costs by an estimated $5 million, the company said 75 of its 600 or so workers are being let go – a move that will result in a $1 million charge against the fourth-quarter financial results.

Despite the dismal fourth quarter, Rick Jones, Pegasystems’ president and chief operating officer, said the company would still report record revenue growth for last year as a whole. Jones added that the downsizing is unrelated to the fourth-quarter revenue shortfall. “We’ve been in the process of redefining and restructuring,” he said.

As part of that effort, Jones said, Pegasystems is expanding its product suite, aligning with new business partners and trying to more deeply penetrate its installed base of users. “We haven’t done everything we can to satisfy the customer,” he said. “There are many other applications they can use that we haven’t provided them.”

A new version of the company’s rules-based product line is scheduled to be announced in the next few weeks, which Jones said will hopefully give Pegasystems more firepower against competitors such as San Mateo, Calif.-based Siebel Systems Inc. and Brampton, Ont.-based Nortel Network Corp.’s Clarify unit. Pegasystems users include Dulles, Va.-based America Online Inc. and Hoffman Estates, Ill.-based Sears, Roebuck and Co., he said.

Pegasystems has had its share of troubles. According to a quarterly filing made to the U.S. Securities and Exchange Commission in November, the company lost 50 per cent of its sales force in 1999. Late that year, the filing said, it also settled two class-action lawsuits related to a restatement of revenue for 1997 and 1998.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Previous article
Next article

Featured Articles

Empowering the hybrid workforce: how technology can build a better employee experience

Across the country, employees from organizations of all sizes expect flexibility...

What’s behind the best customer experience: How to make it real for your business

The best customer experience – the kind that builds businesses and...

Overcoming the obstacles to optimized operations

Network-driven optimization is a top priority for many Canadian business leaders...

Thriving amid Canada’s tech talent shortage

With today’s tight labour market, rising customer demands, fast-evolving cyber threats...

Staying protected and compliant in an evolving IT landscape

Canadian businesses have changed remarkably and quickly over the last few...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now