Intentia pruned its workforce by 300 earlier this year but the new cuts are part of a drive by new CEO Bernard Sciard to return the ailing company to profitability by the fourth quarter of this year.
This is not a difficult target as in its second quarter to June 30, Intentia’s net loss was SEK 7.7 ($1m), down from a loss of SEK 62.6m ($8.3m) on revenue 0.6% down at SEK 766.8m ($101.7m.)
Though Sciard has not been on board long enough to make an impact on the figures, he will be encouraged by aspects of the performance. License revenue increased 26.2% to SEK 260.3m ($33.8m) and it was a 10.8% fall in service revenue to SEK 500.6m ($65.1m) that put the brake on growth.
Not surprisingly, half the headcount reduction will be on the services side as the new management has concluded that significant over-capacity exists there. In any case, with a drive to build channel sales, a significant services organization is less important for the company.
To finance the savings, which will lead to a restructuring charge of SEK 250m ($32.5m) in the third quarter, Intentia plans to raise SEK 270m ($48.1m) from financial group Tennenbaum Capital Partners with a sale of shares and a loan.
Intentia’s sales have been on the slide since 2001 and the board recruited Sciard from competitors Geac in a bid to turn the company around.
