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BMC reports loss, layoffs

The enterprise software maker says it will cut 13 percent of its work force--about 900 jobs--after reporting a first-quarter loss, with much of the work shifting overseas.

David Becker Staff Writer, CNET News.com
David Becker
covers games and gadgets.
David Becker
2 min read
BMC Software announced on Monday that it plans to lay off 13 percent of its work force--about 900 employees--after reporting a bigger-than-expected loss in the first quarter.

BMC sells enterprise management applications that help big businesses manage their information technology resources. The lineup includes products recently acquired from bankrupt Peregrine Systems. The Houston-based company has been hit by the overall slowdown in IT spending, which continues to crimp corporate budgets and inhibit potential customers from completing large transactions, CEO Bob Beauchamp said in a statement.

Beauchamp said he expects the economic climate to remain tough, requiring the company to trim its work force by 13 percent. That will save BMC $25 million to $30 million a year, he said. As of the end of March, the software maker reported having 6,800 workers.

"Although we fully expect the IT spending environment to remain challenging, we are confident that our restructuring actions will allow us to improve our profitability in the second half of our fiscal year," Beauchamp said.

The CEO said the cuts would be focused on direct sales, research and development, and internal IT jobs, with many of those functions to be shifted offshore.

"We are making these reductions with the goal of avoiding any impact (on) our customer relationships," he said.

The layoffs were announced at the same time that BMC announced its financial results for the first quarter, which ended June 30. BMC recorded a net loss of $6.1 million, or 3 cents a share, compared with a loss of $5.2 million, or 2 cents a share, in the same period a year ago. Analysts polled by research firm First Call had expected a loss of 2 cents a share.

Total revenue for the quarter was $309.9 million, up from $305.2 million a year ago.