The reorganization is the brainchild of new CEO Tod Nielsen, who joined in November last year from BEA. Nielsen took over from interim CEO Scott Arnold, who had occupied the hot seat after the CEO before him – Dale Fuller – stepped down on the announcement of a profit warning and missed expectations last July.
In February this year Nielsen announced he had taken the decision to spin off the company’s development tools business, while simultaneously announcing the acquisition of testing tools provider Segue Software.
The tools spin-off, Segue acquisition and now the reorganization are all said to be part of Borland’s attempt to become more customer focused and to accelerate its application lifecycle management, or ALM, strategy.
Borland is continuing to execute on the plan we outlined in February, said Nielsen. We believe these changes will not only streamline operations, but will also better align our resources for success in the enterprise. These changes are designed to get us to an operating model that can more effectively support our long term strategy for growth and profitability.
The majority of staff reductions will come from what it described as the re-scoping of Borland’s international operations. It said that rescoping, along with geographic consolidation, and the planned divestiture of its Developer Tools Group, should provide annualized cost savings of approximately $60m.
Also as part of the restructuring, Borland announced that it has combined its sales and professional services functions to create a new field operations function. In a Computer Business Review interview the company’s VP EMEA, Paul Taylor, said the move was driven by the fact that, With ALM projects, there is a greater need for collaboration between sales, pre-sales and services, to work together and also scope out with partners what it is that they are delivering to customers.
Borland is also combining its customer service and R&D functions, though Taylor said that doesn’t mean that its developers and engineers will be manning the phones to answer support queries: It just means the overall function will be organized to respond more quickly to customer support requests, for example customer support escalating it to R&D more quickly where it makes sense.
The final move in the restructuring sees the creation of a new business operations function, led by Borland SVP Chris Barbin, who will report directly to Borland CEO, Nielsen. That function will apparently focus on the company’s internal processes and systems.
As for the planned sale of the tools business – which includes JBuilder, C++ Builder, Delphi, Kylix and a few other products – Borland said, The divesture process is proceeding according to schedule and attracting a strong number of qualified bidders. Borland is working to have a buyer identified within the next several months.
Asked whether Borland has actually received a firm offer for the tools business, Taylor said: All we can say is that the divestiture is progressing as we expected.
Meanwhile Taylor played down the suggestion that morale at the company must be at a rather low ebb after the announcement of the planned job cuts.
Morale is actually starting to improve, he said. I think there had actually been some frustration that things had not moved on, so I think after this announcement there will actually be some relief that we are moving forward with the reorganization and getting on with the job in hand. I see this as day one for morale – we move forward from here.
Taylor said it was too early to say exactly where the cuts will come geographically. In a statement the company said that it currently serves 29 countries, and that it will focus on enhancing its existing direct sales model in major IT markets, [and] supporting customers in secondary markets through a mix of direct, partner and channel relationships. It said the cuts would be made by the end of July.
