Vignette to cut work force on lowered outlook
The software maker meets fourth-quarter expectations but plans to shut some offices and trim its work force by approximately 15 percent as it predicts weaker earnings.
Vignette, which employs roughly 2,300 workers, plans to lay off approximately 345 employees, according to a company representative.
The Austin, Texas-based company, which develops personalization tools for e-commerce and content-management software, intends to take a charge of approximately $45 million to $55 million in the first quarter. As a result of the new initiative, Vignette said it expects to save about $100 million over the next four quarters.
The news sent Vignette shares plunging. In morning trading, the company's stock dropped $4.81 to $7.69, shedding nearly 40 percent of its value and beating its 52-week low in intraday trading.
Despite a healthy long-term outlook and market position, Vignette blamed the recent move on the slowdown and uncertainty among companies to spend on information technology including software implementation, consulting and other computer services.
Additionally, the company lowered its financial guidance for fiscal year 2001. It now expects to post $100 million in revenue and a loss of 1 cent per share for its first quarter, ending in March. For fiscal year 2001, Vignette said it expects revenues of $500 million and a profit of 9 cents per share. First Call analysts expected the company to post fiscal-year revenue close to $600 million.
Vignette also on Thursday reported fourth-quarter earnings in line with analysts' expectations. For the quarter ended Dec. 31, the software maker posted net income of $649,000, or nil per share, vs. a loss of $2.7 million, or 2 cents a share, for the same period a year earlier.
Revenue for the quarter came in at $123.9 million, a jump from the $40.9 million the company reported in its year-ago quarter.
Vignette, which has seen its stock plummet from a 52-week high of $100 per share to a low of $9.68, competes in the same sector as other onetime highfliers such as BroadVision.
During the fourth quarter, Vignette said it signed a number of larger new clients including Barclays Bank, Caterpillar, Dow Jones, Volkswagen and Nissan North America.
CNET Networks, the publisher of News.com, is an investor in Vignette.