New Round Of Cuts Hit Israeli Companies
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JERUSALEM -- A new round of job cuts have struck three Israeli high-tech companies. Always-On Software said it had recently fired a third of its staff in Israel, Cisco confirmed it intends to cut its Israeli workforce by a quarter, and VerticalNet Israel is said to be preparing to halve its Jerusalem office.
Applications service provider Always-On Software has reduced the staff at its Netanya research and development center from 30 to 20 people in recent weeks.
The company said that although the company has money in reserve, the cuts were necessary to ensure its resources would outlast the current market crisis.
In February, Always-On raised $12 million in equity financing, and $1.5 million in debt offerings. Investors included Star Ventures and Koor Industries.
Last week the company announced 8,500 job eliminations worldwide to add to the 8,000 it announced in February.
HyNEX, a startup Cisco acquired last June, is reportedly slated to be shut down. The closing of that company, which develops intelligent access devices for ATM network providers, would likely represent at least half of Cisco's dismissals in Israel. Cisco owns five Israeli startups that employ 400 people altogether.
Meanwhile, Jerusalem-based VerticalNet Solutions Israel is expected to soon fire 35 employees, amounting to half its workforce.
It's parent company, VerticalNet, is a business-to-business e-commerce provider headquartered in Pennsylvania. VerticalNet Solutions Israel, formerly Tradeum, develops software for the parent company.
According to the report, financial controller Doron Gaz has said that would probably be changes in the company this week, but would not elaborate.
VerticalNet is expected to publish its Q1 financial reports on Thursday evening. Like most companies in this market sector, VerticalNet has been hard-hit by the Nasdaq crisis. The company's stock has plunged from $119 in March, 2000, at the time it acquired Tradeum, to $1.29 on April 17. The stock closed at $2.09 on Friday, reflecting a current company value of $145 million.
VerticalNet issued a profit warning in the fourth quarter of 2000, after missing estimates by $0.13 per share, losing $0.32 per share. The parent company has trimmed 150 employees recently and currently stands at 1,170 workers.
Tradeum was founded in 1998. In August 1999, the company raised $3 million at a company value of $7 million. Investors include Israel Seed Limited Partners, Vertex III Venture Fund, STI Ventures and Scorpio Communications. The company was sold to VerticalNet for $474 million in shares.
Always-On was founded in 1999 and is headquartered in New York City with offices in the Washington D.C. area, Germany, France and Israel.