The turmoil in the enterprise software market intensified last week as US-based Walker Interactive Systems announced an 8% cut in its workforce and Birmingham-based JBA revealed it was in talks with a possible buyer.
Walker predicted its second-quarter results would show a net loss of $25m to $26m (£16 to £16.7m), compared to a net profit of $1.3m for same period of the previous year.
The job cuts form part of an ongoing shake-up as Walker attempts to shrug off its enterprise resource planning label by focusing on industry strongholds such as utilities and retail.
Walker is also on the lookout for a new chief executive officer to replace Leonard Liu, who will continue as chairman.
In a bid to widen its portfolio, Walker will release an electronic procurement package in September allowing companies to do business over the Web.
European managing director Nick Caplan admitted it had been caught off guard by the severity of the market downturn over the last year.
‘The group has been hit harder than we anticipated in the last two quarters. We had increased our sales and support staff but then growth was flat,’ he said, blaming the Year 2000 problem for the sales slump.
Caplan stressed the UK workforce was by and large untouched by the restructuring and said he had arranged to meet with the UK user group.
But other UK users seemed unaware of any cutbacks. A systems manager with motor distributor Inchcape said he was ‘not surprised’ to hear of the changes. He added that the company continued to use an Essbase database, licensed through Walker, but had outsourced its support to another software company – Decision Works, based in West London.
Elsewhere in the enterprise mid-market signs of a consolidation emerged after JBA confirmed it was in talks with an unnamed buyer. Earlier this month JBA announced an 8% cut in the workforce after results showed a pre-tax loss for the second year running.
No obvious candidates emerged for the JBA acquisition but analysts said JBA’s strength in vertical markets made it a bargain for a service company keen to enter the manufacturing industry.
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