Baan Company NV is to sack 20% of its global workforce in a bid to claw its way back to profitability after recording a $31.7m net loss in the third quarter of the current year. A total of around 1,200 jobs will go in an attempt to eliminate duplicate direct sales, marketing and overhead functions, says the company. The ‘streamlining’ will be expensive, involving a one-off charge of $110m in the fourth quarter. The cut-backs in workforce are a dramatic U-turn, as Baan has been frantically recruiting and the current 6,000 headcount is up 69% on a year ago. Certainly Baan is facing a big slowdown in growth with revenues only 12.5% up in the third quarter at $194.9m while the figures for the first nine months are still 30.2% higher at $604.5m. The major worry is a decrease in license revenue, down 20.3% to $86.6m in the third quarter while the first nine months still shows a modest 6.3% growth to $310.7m. The US market is a particular problem with third quarter revenues of $80m virtually unchanged from the previous year. The one healthy area is maintenance and service revenues which increased 68% to $108.4m in the third quarter though this is in line with the 71% rise to $293m for the nine months. Baan made the usual excuses for its problems, citing global economic difficulties, reduction in capital spending by large customers, growing competition and increased customer focus on solving year 2000 problems. But all these factors were faced by its German rival SAP AG which has just reported third quarter revenues up 43% to $1.2bn (CI No 3521). Baan chairman and CEO Tom Tinsley, who took the helm in July, has strengthened his management team by appointing Mary Coleman, former president and CEO of Aurum Software, which was acquired by Baan last year, to be president.
