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Business software firms shed more jobs

Commerce One and Manugistics cut staff, as software makers grapple with industry upheaval.

Software companies Commerce One and Manugistics each announced on Friday plans to cut staff, the latest round of layoffs in a dismal business software market.

Commerce One plans to lay off 56 of its 92 workers, as the company prepares for a shutdown, according to a regulatory filing. San Francisco-based Commerce One, which makes programs designed to help companies keep supplies in stock, said earlier this week that a shortage of cash may force it to file for bankruptcy protection and close its doors.

The company was an Internet darling a few years ago, after signing up big names, including General Motors and Boeing, to use its e-commerce software. At its peak, Commerce One was worth more than $20 billion and employed 3,700 people.

But the much-hyped "e-marketplace" concept that Commerce One envisioned fizzled, taking the company's fortunes with it. A ballyhooed partnership with German software maker SAP also fell apart.

Separately, Manugistics said it will cut 90 workers--about 11 percent of its staff--by next March. The layoffs follow a disappointing quarter, in which the Rockville, Md., company saw sales fall by 14 percent and net losses more than double. The numbers also came in below analyst estimates for the company's fiscal quarter, which ended Aug. 31.

The supply chain software company also restructured its management ranks recently, firing former president and software industry veteran Jeremy Coote last month. The company hired a new chief executive in July, following a string of weak earnings and a decline in market valuation.

Although the two companies don't compete directly, they both face tepid demand for application software from businesses. For several years now, companies have been trimming budgets for such software, a broad category that includes systems for accounting, inventory, customer service and staffing.