Computer Associates will axe up to 30 jobs in Australia as the local operation of the software vendor strips down operational costs.
The reductions follow an agreement with US Federal prosecutors to restitute $US225 million back to shareholders in the wake an accounting fraud scandal which has seen former CA CEO Sanjay Kumar and former worldwide sales director David Richards indicted on fraud and obstruction of justice charges.
Confirming cuts were on the way, CA Australian managing director Gavin Selkirk told Computerworld the local operation was currently undertaking a wide-ranging internal review as part of a move to minimise both operational costs and discretionary expenditure.
The review comes as part of a company-wide effort to reduce its headcount by 800 worldwide and operating costs by $US70 million.
Selkirk said while it was too early to give specific numbers about how many Australian positions would go, he had every confidence CA's local operation would be able to meet a company-wide deadline for imposing reductions by the end of October 2004.
"The news has just broken, it's just hit the decks. We are not expecting [the reduction process] to be protracted. The business is always reviewing costs, it's a normal part of running the business," Selkirk said, stressing it was the role of the executive management team to deliver value back to shareholders.
In terms of how the CA's cost shedding exercise will translate across the globe, Selkirk said 70 percent of reductions would come out of North America with 30 percent coming from its international operations.
Asked how many jobs would be lost locally, Selkirk said he could not rule out as many as 30 jobs could go.
"I'm not sure...we can't ever rule it out," he said.
CA employs 600 people in Australia and cited a worldwide headcount of 15,300 employees in March 2004.
In terms of how the job cuts will impact CA's customers, a financial sector IT security manager who uses CA's eTrust directory product said he was concerned after-sales support could suffer because it was "one obvious soft target [which] doesn't come off its bottom line."
Meta Group senior security analyst Michael Warrilow said while the cuts were to be expected, he did not anticipate CA's operations in Melbourne would be pared back.
"[CA's eTrust] security suite is getting a better reputation. It has been winning clients in the financial sector," Warrilow said, adding it was more likely CA would attempt to sustain its current growth rather than pare back resources.