The Birmingham-based software house JBA is expected to announce job cuts later this year as part of a restructuring prompted by a slump in the enterprise software market.
JBA’s 1998 results showed a decline in pre-tax profits to £1.7m, compared to £5.2m the previous year. This is the second consecutive fall.
A senior JBA source could not give the exact number of UK job losses, but said: ‘You would expect job losses with any business re-engineering and we’re not ruling them out over the next 6 to 12 months.’
JBA executives said users would not be adversely affected by job cuts, but hinted the restructuring could alter the company’s existing relationships with the Big Five consultancies, although not in the short term.
But JBA users were less confident about the impact of the restructuring.
‘Job losses are worrying because software suppliers don’t have enough people in software support,’ said Ray Babb, information systems manager for MC Imaging, which is part of the Mitsubishi Corporation.
He added that it would be a mistake for JBA to launch a restructuring program in response to a sharp fall in its stock market price.
James Holmes, IT manager at Calypso Soft Drinks, said JBA was steadily expanding its customer service centre and had the right products for the market. ‘It is right to stay in industry areas it knows,’ he said.
JBA’s restructuring plan will focus more closely on its industry strongholds such as the footwear and beverage manufacturing sectors.
It is also hoping to bounce back through a raft of e-commerce products for the supply chain, called @ctive Enterprise Series, launched in April.
Ken Briddon, JBA’s CEO, has placed the e-commerce products at the heart of the company’s long-term recovery.
But Laurent Lachal, an analyst at IT research group Ovum, said JBA’s strategy did not offer anything new. ‘Everyone has e-commerce products and JBA has always concentrated on vertical industries anyway,’ he said.
‘It has been struggling for a number of years and the product has lost direction.’
The prospect of job losses at JBA reflects an increasingly gloomy market for ERP giants such as Baan and SAP.
Most ERP vendors have seen their profits drop this year. Analysts claim year 2000 and European Monetary Union-compliance work has drained IT budgets; the market will probably take until late next year to recover.
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