Siebel To Cut Another 490 Jobs As Revenue SlidesSiebel To Cut Another 490 Jobs As Revenue Slides

The ax is out again at Siebel Systems Inc.

The maker of customer-relationship management software said Tuesday it will eliminate another 490 jobs in an effort to boost sagging profits. That's 9% of Siebel's 5,500-member workforce, and it means the company will have axed 2,400 employees--nearly one-third of its workforce--since the end of 2001.

Company officials say Siebel will close offices and shift some operations outside the United States. The company estimates that the moves will produce quarterly savings of about $30 million by year's end and $40 million by the second half of next year.

"The enterprise application software market remains quite soft," said CEO Tom Siebel. "It doesn't appear that the IT economy is picking up and as a result we are restructuring to reflect current business levels." Siebel said he's seen various reports speculating that the company was preparing for layoffs numbering in the thousands, but that those weren't accurate. About 350 workers have already left the company, with 140 more scheduled to be dismissed within the next few weeks or months, he said. "We have bit the bullet after going through a long dry spell," he said.

The company disclosed the cutbacks as part of its second-quarter earnings announcement.

The company earned $9.7 million, or 2 cents per share, a 67% drop from net income of $29.8 million, or 6 cents per share, in the year-ago quarter. Revenue for the three months ended June 30 totaled $333 million, a drop of 18% from $406 million last year. The numbers hit the company's lowered targets set earlier this month, when management warned that results would be below previous expectations.

Tuesday's results continued the slide of a company that soared during the tech boom of the late 1990s. Siebel thrived by selling expensive CRM software that helped companies do a better job of selling products to their customers. Sales exceeded $2 billion in 2001 but have slacked off since then as business customers cut down on tech spending.

"They are struggling partly because they didn't see the pain [of the downturn] as soon as others did," analyst Cameron Steele of RBC Capital Markets told The Associated Press.

Siebel also has been sparring with some investors upset about the huge stock-option windfalls that management has pocketed. A shareholder suit alleges that Siebel's board awarded many of the stock options improperly. The San Mateo, Calif., County Superior Court case is scheduled for a Nov. 3 trial.