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Sybase realigns, lays off 600

Hoping to streamline its operations and return to profitability, Sybase is laying off just under 600 of its more than 5,600 employees.

Hoping to streamline its operations and return to profitability, Sybase (SYBS) said today that it will lay off just under 600 of its more than 5,600 employees.

The largest percentage of the laid-off workers will come from Sybase's operations in the San Francisco area, with the remainder coming from its Boston-based operations, a company representative said.

Last month, the database software maker posted a fourth-quarter net loss of $25.5 million, or 32 cents a share, compared with profits of $5 million, or 7 cents a share, posted a year earlier.

Sybase CEO Mitchell Kertzman said at the time that the company expected to reduce its workforce by the end of March to move toward profitability on moderate revenue growth. (Kertzman is a board member of CNET: The Computer Network.)

The chief executive said he anticipated that the company would be "profitable starting in the second quarter, for the rest of the year, and the year as a whole."

In a memo to employees issued today, executives said the realignment is intended to move Sybase from a product company to a "solutions" vendor and will eliminate "redundancies." The company intends to focus its efforts on Web computing, occasionally connected computing, and data warehousing.

A Sybase representative said no further reductions are anticipated at this time.

Wall Street analysts were not surprised by the move. "It's been anticipated for some time," said Esther Schreiber, an analyst with Credit Suisse First Boston.

Sybase, like other database software makers, including Oracle and Informix, has been hit by a slowdown in sales of its flagship products. The company also has been battered by troubles in its Japanese subsidiary, as well as by the overall financial turmoil in Asia.

By lessening its dependence on a single product, Sybase management hopes to broaden the company's revenue base and stabilize its financial picture.

To accomplish this, Sybase plans to offer more specialized consulting services, along with packages combining software, consulting, and systems integration, to large companies.

Analysts see the consulting area as a prime growth opportunity for Sybase, Oracle, and other providers of server-based software.

Sybase shares were down 1/8, to 9 15/16, in late afternoon trading.