Another IT Consultant Restructures
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Stamford, Conn.-based META Group Inc., best known for its research reports and consulting practice, Thursday announced a reshuffling of the executive deck and said that it had slashed its work force by 15 percent in order to save $10 million.
Stepping down are META's President Larry R. DeBoever and Peter Burris, co-research director, president, and chief executive officer of the firm's online venture, metagroup.com. Both will, however, continue as non-paid research experts for consulting and speaking engagements.
As for the staff cuts, 100 employees -- primarily in sales, administrative positions and metagroup.com -- have been let go. The company's work force now stands at 595.
Dale Kutnick, META's chairman, CEO, and co-research director, said the maneuvering would result in an estimated annual cost savings of approximately $10 million, including $8 million in payroll and related benefits savings. The company currently expects to reduce capital expenditures from nearly $12 million in 2000, to approximately $4 million in 2001. The changes are geared to help META stay on the path to profitability by the third quarter of 2001.
META Group expects to take a one-time cash charge of approximately $400,000 in connection with this reorganization in the second quarter of 2001. Metagroup.com will also be rolled into the company and will no longer serve as a separate division. Still, it will continue to offer research and online tools to clients.
In the meantime, Charles "Chip" McCreary, president of executive recruiting firm Austin McGregor International, has been asked to search for a new president who, after a specified period of time, would become chief executive officer of META. For now though, the outfit has established a special operating committee consisting of Kutnick; Robert Toole, chief operating officer; John Piontkowski, chief financial officer; and Howard Rubin, executive vice president and research fellow.
Calling the reduction in headcount "painful," Kutnick expressed confidence that the restructuring will make META leaner and meaner to improve operating efficiency. He also stressed that reductions in research services was limited to five workers to improve services to clients.
META's announcement is the latest in a series of cutbacks among companies that provide services and advise companies in the technology arena. Especially hard hit have been e-business firms providing Web development and strategic consulting, including Viant Corp. and Organic last week and Modem Media in March.