Rockville software company cuts jobs


Manugistics Group Inc., a Rockville software company, reported lackluster results for the second quarter yesterday and said it plans to cut up to 12 percent of its work force -- as many as 166 jobs -- as it struggles to become profitable.

The company also announced yesterday that its president, Richard F. Bergmann, who has been on a leave of absence since June, is leaving the company to pursue other opportunities. Bergmann will not be replaced. Instead, the company has reorganized into four divisions, and division presidents will report directly to the company's chairman and chief executive, Greg Owens, the company said.

Manugistics' losses and layoffs are indicative of the troubled software sector, said Robin Roberts, an analyst for Stephens Inc., an investment banking company in Arkansas. At the same time, she said, the company is encountering heavy competition.

Many software companies have to deal with heavy start-up expenses, Roberts said. But when the time comes to cut back, they don't want to make the cuts so deep that it hurts morale and affects performance, she said.

"It's a really fine balance that's hard to keep," Roberts said.

For the quarter that ended Aug. 31, Manugistics reported a net loss of $47.7 million, or 68 cents a share, on revenue of $69.9 million. The company had a net loss of $21.7 million, or 32 cents a share, on revenue of $73.8 million in the corresponding quarter last year.

Manugistics' adjusted net loss -- which does not include restructuring and other charges -- was $13.1 million, or 19 cents a share, in the second quarter. In last year's second quarter, it had an adjusted net loss of $10.7 million, or 16 cents a share.

"While we are still feeling the effects of the recession and lower spending on technology, we are encouraged by the strong levels of sales activity and requests for proposals that we are seeing," Owens said in a statement. "We believe that we have emerged as the clear leader in our market and are confident that our leadership position will continue to strengthen as the economy improves. Nonetheless, we have decided to take additional steps to lower our expenses and return to adjusted operating profitability sooner."

Manugistics, which had 1,387 employees before the job cuts, began its layoffs yesterday. The company will take a $2 million to $4 million restructuring charge in the third quarter, but the cuts are expected to eventually save the company $5 million to $7 million per quarter.

Yesterday's layoffs were not the first for Manugistics. The company cut about 184 jobs in June. Also, employees were told not to come to work the week of July 1, shortly after the company moved into its new headquarters, as part of an unpaid leave program to save money.

During the second quarter, Manugistics reported that it had won several new clients, including Campbell Soup Co. and Circuit City Stores Inc,

Yesterday's announcement was released after the close of the stock market. Manugistics shares fell 13 cents, to $3.85.

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