Baan Posts Loss, Announces Restructuring, Layoffs - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Baan Posts Loss, Announces Restructuring, Layoffs

Buffeted by a substantial third-quarter loss, Baan Co. is planning layoffs and a corporate restructuring.

The vendor of enterprise resource planning software today reported a loss of $31.7 million for the quarter, compared with a $18.3 million profit last year. Following a profit warning earlier this month, Baan lost 16 cents per share, well below the profit of 15 cents per share Wall Street had originally predicted. Revenue for the quarter was $195 million, up 13% from $173 million in the year-ago quarter but not high enough to bring a profit.

In the aftermath of the weak results, Baan will lay off roughly 1,200 employees, or 20% of its workforce--this after the company had increased its head count 69% in the quarter through hiring and acquisitions such as the August purchase of Caps Logistics Inc., a supply-chain vendor. Baan will restructure its organizations so that all sales, support, marketing, consulting, and engineering efforts from its various acquisitions are in centralized organizations. The layoffs will accordingly eliminate duplicate sales, marketing, and administrative positions in its separate units, but won't affect engineering and customer service groups. The reductions will produce a one-time fourth-quarter charge of $110 million.

Baan blamed the poor results on a number of factors, including global economic uncertainty, reductions in capital expenditures by large companies, higher competition, and customer focus on the year 2000 problem. That has led to longer sales cycles, customers' purchasing hesitation, deferred IT projects, and allocation of expenditures to year 2000 problems, the company said. With those factors looming, Baan says it will shift its focus from large enterprises to the midsize market and will come up with cheaper applications that are simpler to implement. It will also move away from the direct-sales model to more partnerships and channel distribution, which should give the company a lower cost structure.

Baan also jostled its management structure, naming as president Mary Coleman, former president and CEO of front-office vendor Aurum Software Inc., which Baan acquired last year. Tom Tinsley, formerly president, CEO, and chairman, will remain as chairman and CEO.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
News
How to Create a Successful AI Program
Jessica Davis, Senior Editor, Enterprise Apps,  10/14/2020
News
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll