Digital Equipment Corp may not be out of the woods yet, but Lotus Development Corp has plunged deep in the mire with a first quarter loss of $17.5m and a plunge of 18% in turnover. The company is responding by cutting spending by $50m, but it hopes to avoid major staff cuts in its attempt to bring its four core businesses to sustained profitability by year-end. But head-count is expected to be affected as each of the business units – desktop, communications, consulting and public networking – trims costs to meet its own profit targets, said chief financial officer Ed Gillis. The company is to end packaging and duplication of its software products and will contract the work out. The loss and fall in turnover are partly down to a six- to seven-week period during the quarter when it halted Notes sales as it completed the new version of the product and renegotiated the price of licences already ordered by existing customers since December 1. About 45,000 of the 220,000 Notes user licences shipped during the quarter were effectively free of charge as a result. Software for MS-DOS also left a big hole, with just $14m against $40m a year ago.
