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Siebel shuffles execs, warns of sales shortfall

Siebel shuffles execs, warns of sales shortfall

Siebel warned of another set of grim quarterly sales results, as it simultaneously announced a management shuffle.

Business software maker Siebel Systems warned Thursday of another set of grim quarterly results, as it simultaneously announced a management shuffle that assigns new duties to several of the company's top executives.

Siebel said revenue in its second quarter, ended June 30, was between US$312 million and US$314 million. Those figures are at the lower end of the guidance it gave analysts in April. The consensus estimate of analysts polled by Thomson First Call was for revenue of US$319.2 million. Siebel said its revenue from license sales was around US$78 million -- a slight improvement on last quarter, when the company hit US$75 million in license sales, its lowest level since the late 1990s.

"Siebel's preliminary second quarter results show encouraging signs of progress but also underscore clear areas of improvement," Siebel Chief Executive Officer George Shaheen said in a written statement.

Shaheen blamed delayed deals, particularly in the public sector, for the shortfall. One of Shaheen's first steps upon assuming the CEO position was to begin reorganizing Siebel's sales force, with an eye toward streamlining the sales process and revamping Siebel's sales compensation. He again cited those changes on Thursday while discussing Siebel's plans for improving its business.

Siebel adopted a restructuring plan on June 30 and expects to incur US$75 million in related charges during the just-ended quarter, the company said. The changes include US$62 million in fixed asset write-offs and facilities consolidation costs, US$6 million for employee severance, and US$7 million associated with Siebel's CEO transition in April, when the company's board fired Mike Lawrie less than a year into his tenure and elevated Shaheen. Including the charges, Siebel expects an operating loss for the quarter of around US$74 million. It expects to incur up to US$15 million more in restructuring costs next quarter

As of June 30, Siebel's employee headcount stood at close to 5,100, down 170 from the end of its last quarter. The company plans to announce its final second-quarter results in late July.

Separately, Siebel announced several executive changes, including a title shuffle for its longtime number-two executive, David Schmaier, who will now serve as executive vice president of corporate strategy. Schmaier, an 11-year Siebel veteran, previously managed Siebel's product strategy.

The product job will now fall to Bruce Cleveland, who becomes the company's senior vice president of products. Cleveland returned to Siebel last year to take charge of its new OnDemand hosted CRM (customer relationship management) service and its fledgling SMB (small- and medium-business) outreach efforts. He will retain those responsibilities while also overseeing Siebel's broader product strategy, the company said.

Siebel also moved its manufacturing and distribution industries general manager, Les Rechan, to the new role of senior vice president of Americas sales. Finally, it named Patty Azzarello to be its chief marketing officer. Azzarello has held a variety of industry positions, including serving as general manager of the OpenView business unit at Hewlett-Packard. She most recently served as CEO of IT governance software maker Euclid.


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