TECHNOLOGY: UP to 80 jobs will go at the Irish operations of troubled e-learning group SmartForce. The cuts were announced last night as part of a dramatic effort to cut costs in the face of declining markets.
SmartForce, which provides e-learning products to business, warned two weeks ago that sales would fall to a third of those previously forecast.
"We did not get where we are by taking half measures in the face of business challenges," said chairman and chief executive Mr Greg Priest. "Our cost base is simply too high for current market realities."
The company has called a series of meetings with staff this morning to outline the cutback.
Globally, the company announced a cull of 421 jobs, or 23 per cent, out of a workforce of 1,800. By that standard, the Irish workforce of 500 will suffer less than others, a factor that is being attributed to the presence of research and development operations at its Clonskeagh plant in Dublin. These are seen as vital to the company's return to profitability. SmartForce has been one of the most successful and high-profile indigenous high tech companies but has suffered - compared, for instance, with educational e-learning group Riverdeep - as business cuts back on technology spending.
For the first three months of 2002, SmartForce recorded sales of $43 million (€48.4 million) down from $61.3 million in the same period in 2001. Before allowing for the exceptional costs involved in the abondoning of its acquisition of US software group, Centra, and the amortisation of "acquired intangibles", the company lost $14.9 million or 26 US cents per share.
At the operating level, the loss was $21.7 million against $585,000 in the first three months of last year.
The firm said it would take a charge of about $30 million in the second quarter related to the restructuring of the group. SmartForce said this restructuring would "focus the business on the company's core strategies and eliminate peripheral activities".
Mr Priest said that, although the company faced real challenges, it was fully committed to taking the steps necessary to retain and build its position in the market and return to profitability.
