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Sapient Sacks 545, CFO Quits

Sapient has laid off 545 workers as orders for its Internet consulting services continue to lag, especially from financial service customers.

The Cambridge, Mass., firm also said CFO Edward G. Goldfinger resigned to take a job with Empirix, a Waltham, Mass., Web applications testing firm. Susan D. Johnson, senior vice president, will serve as acting CFO as a search for a permanent replacement commences. She previously held the CFO post from 1994 to 1999.

The job cuts, rumored on message boards this week, primarily affect Sapient's North American workforce and consist of 415 "professional" and 130 "administrative" staffers.

The company has offices in Atlanta, Cambridge, Chicago, Dallas, Denver, Houston, Los Angeles, New York, San Francisco and Washington, D.C. It will also take steps to dispose of surplus office space.

"These were the right actions, they were not easy actions, but they were something we had to consider," Jerry Greenberg, Sapient's co-CEO told analysts in a morning conference call.

Greenberg said the company will try to make revenue gains in support and maintenance of customer Web operations. Most of that work will take place in India, where the cost of labor is cheaper. Following the layoffs, most of which are immediate, a third of the company's workforce will be in India, Greenberg said.

Sapient will take a restructuring charge of $50 million to $55 million in the first quarter of 2002 for severance packages and office consolidations. Counting the payouts, the company expects to finish the quarter with $200 million in cash and short-term investments.

The company also said its expects to be at or slightly below previous first-quarter guidance of a pro forma net loss of 11 cents to 13 cents per share on revenue of $55 million to $60 million.

The actions follow two large round of job cuts last year: 720 in March and another 390 in July. Shares of SAPE opened down 0.05, or 1 percent, to 4.08. In the last 52 weeks, the issue has ranged from 3.15 to 15.25.