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CA Swings Ax, Fells 5% of its People
CA Swings Ax, Fells 5% of its People

Related Links:

  • "Not Guilty," Both Kumar and Richards Tell Judge
  • Ex-CA CEO Sanjay Kumar's Looking at Doing 100 Years
  • Computer Associates Founder Charles Wang Government's Next Target


    Computer Associates came out swinging the ax Wednesday saying that it's going to fire about 5% of its 15,000 employees in the next month, leaving the door open for further layoffs down the road.

    It has been widely rumored that the company has been considering laying off 10%.

    Some 800 employees worldwide will be affected by Wednesday's decision.

    All departments will be impacted but corporate marketing and development will bear the brunt of the cuts. CA's sales force won't be hit.

    On a conference call, CA's interim CEO Ken Cron said the layoff "enhances CA's ability to move forward, accelerate growth, and add profit to the bottom line."

    The move is projected to save CA $70 million annually, a number that CA said - surprise, surprise - that it had factored into the guidance it gave in July when it cut its annual revenue projections by $150 million to $3.4 billion-$3.5 billion. At the time, CA also projected a cost savings of $110 million to minimize the EPS decline to three cents a share instead of 15 cents.

    CA expects the restructuring will cost $40 million, or four cents a share. Most of the anticipated charge - about $25 million - will be taken its second fiscal quarter ended September 30 and the rest by the end of its fiscal year.

    "Our plan is designed to ensure that CA resources are aligned with the growth opportunity and initiative," Cron said.

    CA COO Jeff Clarke said 70% of the terminations would be in North America; 200 people will be dropped at the company's Islandia, Long Island headquarters.

    Meanwhile, CA is in the doghouse as far as users go according to a customer loyalty survey by Walker Information Inc, which polled 13,000 customers and reported results on 51 companies.

    CA placed below the industry average in customer service, product quality and how easy it is to do business with it despite its attempts to improve things.

    Other recent outside surveys have also underscored user discontent to the point of bolting. CA's own surveys paint a different picture.


    Related Links:
  • "Not Guilty," Both Kumar and Richards Tell Judge
  • Ex-CA CEO Sanjay Kumar's Looking at Doing 100 Years
  • Computer Associates Founder Charles Wang Government's Next Target 
  • About Maureen O'Gara
    Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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