FileNET Cuts Workers; Sales Inching Upward, But 2003 Looks Tough
By ANDREW SIMONS
Times still are tight at Costa Mesa’s FileNET Corp.
The software developer recently laid off 3% of its staff, or about 50 to 60 workers in several parts of the company, a FileNET spokesman said. Workers in engineering, sales, and marketing were impacted.
FileNET declined to provide specific numbers on the cuts, which weren’t confined to the company’s headquarters.
“The goal of the business plan is get it better aligned with top-tier customers in order to serve them better,” spokesman Tom Hennessey said. “It was a part of a restructuring to do that. In the reorganization, the numbers came out across the entire company.”
The move comes as FileNET’s sales are slowly rising. For the third quarter, the developer of document imaging and data management software saw revenue rise 3% to $83.1 million from a year earlier.
FileNET saw an operating profit of $759,000 in the quarter, vs. a $4.5 million operating loss a year ago.
“We remain cautiously optimistic, but believe that business will continue to be difficult as well in 2003,” FileNET Chief Executive Lee Roberts said at the company’s recent analyst conference. “When spending does recover, we believe FileNET will emerge from the current slowdown a stronger company.”
The company has been working hard to cut costs. FileNET trimmed its workforce last year,a move the company says helped it make profits despite the hard times.
But FileNET’s April buy of eGrail Inc., a small maker of software for managing content on Web sites, offset last year’s job cuts. The acquisition returned the company’s headcount to last year’s number.
FileNET doesn’t make a habit of laying people off, partly because of Roberts’ contention that most decisions to cut people are done in haste.
“When things go bad, a lot of other companies just lay people off,” Roberts said in an interview last year. “When things get better, these companies have to go and hire their employees back and deal with morale problems. It takes them a year to get back.”
Instead, FileNET has resorted to temporary office shutdowns and making employees take time off at the holidays. FileNET told workers again this year to take vacations for the holiday season.
The first week of mandatory vacation is Thanksgiving week. The second is the week of Christmas, a company spokesman said.
The mandatory vacations are designed to cut costs and avoid layoffs.
Last year, company officials said they planned to explore all ways of saving money. The company tried to cut bonuses for one quarter but backtracked after workers complained.
Under Roberts, FileNET has shifted its focus from document imaging,scanning and managing paper documents,to handling online data.
FileNET’s Web-based Panagon software sifts through data used in other business software and company communications so it can be analyzed.
