Vignette to Cut Jobs in the Face of A Cooling Economy
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Despite reporting record fourth-quarter results that met analysts expectations, e-commerce software maker Vignette Corp. Thursday said it anticipates lower results in 2001, which will lead to about 300 job cuts and facility consolidation.
Once a darling for analysts in the industry, Vignette said it expects to earn a penny a share in the first quarter on revenue of $100 million, and have earnings of nine cents a share on revenue of $500 million for the year.
Analysts had expected first-quarter and full-year EPS of 1 cent and 11 cents, respectively.
Vignette, which will cut its workforce by 15 percent in preparation for the nationwide slowdown in technology spending, reported quarterly revenues of $123.9 million and $366.7 million for the year to date. It also revised earnings for 2001, saying it expected revenues of $100 million and core EPS of $.01 for the first quarter of 2001 and revenues of $500 million and core EPS of $.09 for the full year 2001.
As a result of these actions, the company will incur a charge of approximately $45 million to $55 million in the first quarter. Vignette expects to save approximately $100 million over the next four quarters as a result of the cuts.
Greg Peters, chairman, president and chief executive officer of Vignette, said in a company statement his company managed to sway a slew of Global 1000 companies to choose Vignette's software over such rivals as Broadvision and TIBCO Software. Some of these included Dow Jones & Co. and Volkswagen.
Despite this measure of success, Peters said cuts were necessary to maintain the path to profitability.
"Our priorities are simple," Peters said. "First, to continue to ensure that we have the most value-added solutions available in the market so we can continue to grow our business and market share and second, to do so profitably."
whose stock plummeted more than 43 percent on
the news Thursday to $7.06, did not return calls seeking comment.