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Corel layoffs to hit engineering team in Ireland

The struggling software maker says it will lay off 139 employees in Dublin as part of a restructuring plan aimed at cutting annual expenses by $40 million.

    Struggling software maker Corel today said it will lay off 139 employees in its Dublin, Ireland, engineering facility as part of a restructuring plan aimed at cutting annual expenses by $40 million.

    The Ottawa, Ontario-based company, which develops graphics software, said the layoffs will take place in three phases beginning 30 days from today. The move will affect positions in departments such as Web services, technology, technical services, finance, localization, manufacturing, human resources and management information systems.

    Corel, which recently announced the departure of its founder and chief executive, Michael Cowpland, intends to reassign its Dublin engineering operations to corporate headquarters. The proposed consolidation of Corel's Dublin-based engineering teams is aimed at improving the troubled company's financial outlook.

    There will be opportunities for some of the employees to relocate to Canada, the company said.

    The move comes at a crucial time for Corel, which has suffered from financial woes, lagging sales and a failed merger.

    The 15-year-old company has tried various makeovers to fit the changing times. Originally, Corel focused on graphics software and later moved into office applications by buying WordPerfect. It has also tried its hand at Internet appliances and network computers.

    Most recently, it made an effort to get a piece of the popular Linux movement. However, like the office-application push, this effort is meeting muted results. Corel Linux, the company's version of the Linux operating system, has not been selling well. In recent quarters, Corel has posted losses and declining revenues.

    In a conference call today, Corel executives said the company is well under way with its cost-cutting program and plans to make additional announcements by the end of this month. Corel is slated to report third-quarter financial results Sept. 27.

    "This decision to consolidate our (Dublin) operations is part of a broader strategy to support long-term growth," said Derek Burney, Corel's interim president and chief executive. "While today's decision (to lay off employees) by no means is an easy one, it is indeed a right one."

    While Burney said he could not promise an end to layoffs, he reiterated that Corel's steps to secure long-term growth will make financial and strategic sense.

    Under its overall cost-restructuring plan, Corel said it expects to reduce expenses by approximately $40 million yearly. The cost-cutting measures are being implemented across all departments, including $18 million in salaries, benefits and third-party contract expenses; $12 million in advertising, marketing and market development costs; $5 million in cost of sales and product-related expenses; and $5 million in other general and administrative costs such as facilities, travel and corporate sponsorships.

    Corel said that a core team comprising professional services, manufacturing and distribution will remain at its Dublin facility to support the company's international customers. Manufacturing for international distribution will continue to be outsourced in Ireland.

    In June, Corel cut 320 jobs, or 21 percent of its work force, as part of the restructuring program. The layoffs were the first step in the company's plan to slash $40 million from its annual budget.