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i2 Technologies plans staff cuts

The supply chain software maker says it plans to cut staff amid declining second-quarter revenues that came in below expectations.

Supply chain software maker i2 Technologies said Tuesday that it plans to cut staff amid declining second-quarter revenues that came in below expectations.

In a preliminary announcement, i2 said it expects to report revenues of $117 million to $120 million for the second quarter, ended June 30. Analysts polled by First Call estimated the company would book $151 million in revenues. Revenues are down by more than half from the same period last year, when the company posted $241 million in revenue.

The company expects to report a loss of between $85 million and $88 million for the quarter, before taxes, and hopes to breakeven in nine months to a year.

On a conference call, i2 Chief Executive Sanjiv Sidhu attributed the disappointing results to a slump in demand for business software, smaller deals, and distraction caused by recent management changes.

In March, i2 named Sidhu its new chief executive after then-CEO Greg Brady stepped down. The company's head of sales in the United States, Tom Cooper, also left i2 at that time.

The company has already cut about 10 percent of its work force in the past year, reducing staff to roughly 4,800. The company will continue to restructure, Sidhu said. The number of employees to be laid off in the next round will be announced July 16, when i2 releases the final earning results for the quarter. The company's consulting and services organization may be a focus of the restructuring, Sidhu said.

The company also announced Tuesday the resignations of Philip Crawford, the president of its European, Middle East and Africa unit, and its chief marketing officer, Katrina Roche. The company has already filled the positions from within the company.

Like other software companies, i2 has suffered the blows of the U.S economic slowdown as corporations slash technology spending. Competitor Manugistics posted a wider-than-expected first-quarter net loss on declining sales last week. The company expects to eliminate about 12 percent of its work force in a cost-cutting effort.

Both companies make software the enable manufacturing companies to plan production and communicate with suppliers and customers over the Internet.