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Siebel faces restructuring, flat revenue

Siebel faces restructuring, flat revenue

Customer relationship management software vendor, Siebel Systems, plans to cut out a layer of its operating hierarchy and reduce staff as it faces continued flat revenues.

Reporting its preliminary earnings for its second quarter, that ended June 30, the company estimated its overall revenue at the high end would be about $US334 million, roughly similar to the first quarter's $US332.8 million. It estimated revenue from new license fees, a reliable indicator of a company's health, at $US110 million, down slightly from $US112 million in the first quarter of 2003.

In a statement, Siebel laid blame for the weak numbers on the "unexpected delays in purchasing decisions" by customers and prospects because of the uncertain economic climate.

Chief Financial Office, Kenneth Goldman, also said that Siebel would eliminate 263 jobs, reducing the workforce to 5589.

CEO, Tom Siebel, said that because the economy was not picking up, the company would restructure over the next two months. As part of these efforts, the company would eliminate a layer of management along with some unprofitable business operations. The company would be left with a "structure that we think will allow faster decisions, faster feedback from the market, and simpler interaction for the customer."

Siebel also said the changes would not disrupt service to the company's clients.

"The customer today goes through a number of points of contact into Siebel, and (this) will be kind of consolidated," he said. "And so the customer will just simply have a primary contact that will tend to manage all those various activities for the customer, so they don't have to manage it themselves across say education, professional services, sales, customer support, all of the expert services, multi-channel services."

The company will report its final results for the second quarter on July 22.


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