Iona Technologies is to reduce its 618-strong workforce to less than 450, cutting at least 168 jobs in a bid to return to profitability by the end of the year.
The company, which shocked the market with a dramatic profit warning a fortnight ago, confirmed it made a first-quarter loss of $0.36 per share yesterday and outlined plans to get back on track.
Chief executive Mr Barry Morris said his "highest priority was to get back to profitability as quickly as possible" and by the end of 2003 at the latest.
To achieve this, he set out a three-point plan which includes "a substantial simplification" of the structure of the company, a reduction of its management layers and the headcount.
Iona, which employed more than 1,000 people at the height of the technology boom, has already begun work on the restructuring and hopes to have it largely completed in the second quarter, according to Mr Morris.
The restructuring is expected to cost $11-$14 million and will cut operating expenses to $20-$22 million per quarter by year-end.
Mr Morris declined to comment on how many jobs would be lost at Iona's Dublin offices.
"Dublin is our headquarters and it will remain our headquarters where our key executives are based. There is no reason to expect it to suffer a disproportionately high number of job losses," he said.
Iona also plans to improve the efficiency of its sales effort through a greater focus on its top 100 customers and the development of an indirect channel.
To this end, it has appointed a new vice-president of channels, Mr Mark Rogers, who joins from US software company Identify.
The company is also aiming to capitalise on changes in the integration market by focusing on new Web services products which it believes offer a growth opportunity for the company.
In Dublin, shares in the company lost 12 cents to €1.30 as analysts said the stock would find it hard to move ahead in the absence of signs of a recovery in sales.
"It's not a clear recovery case," said one analyst, pointing to the uncertainty over revenue. He noted the company could yet end up being taken over or linking up with a larger industry player.
Iona remains cautious about the short-term outlook, predicting that the tough conditions that prevailed in the first quarter will persist into the second.
It expects to record broadly flat revenues in the $17-$19 million range in the April-June quarter and a net loss per share of $0.59-$0.72.
This reflects the restructuring costs of $11-$14 million or $0.34-$0.43 per share.
As announced a fortnight ago, the company reported revenues of $17 million and a net loss of $0.36 per share in the first quarter as the slowdown in the telecoms and financial services sectors in particular took their toll.
Iona said it closed only two transactions of more than $1 million in the three months to the end of March and only six between $250,000 and $1 million, below its normal level of 15 to 25.
