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February 28, 1999


By CBR Staff Writer

Just a couple of days after posting a profit warning for its fourth-quarter results (due tomorrow), enterprise resource planning (ERP) software vendor Baan Co admitted it was canceling two of its major user group shows later this year. Cash-strapped Baan, which last week said it expected to show a $250m loss for its fourth quarter, said it was canceling the two BaanWorld user group conferences scheduled to take place in North America and Europe and replacing them with a series of smaller scale town hall meetings. A spokesperson for Baan told ComputerWire the move was designed to give more users a chance to attend the conference and to create a more intimate environment between Baan and its customers. He denied the obvious rumors that the cancellation was a cost-cutting exercise, explaining that the company was simply reallocating resources that would have been spent on BaanWorld. Although he wasn’t sure of an exact itinerary, the spokesperson said that the meetings would take place throughout the second and third quarter. He added that he didn’t know whether or not they would extend as far as Europe. Despite attempts to prove otherwise, industry experts say it’s clear that Baan is trying to cut costs wherever possible. As news of the canceled shows came to light, rumors also began to circulate about possible staff cuts, which Baan also denied. But things don’t look good. In an internal company memo, obtained by the Wall Street Journal last week, Baan president Mary Colemare said the company needs to cut another $15 million from its expenses, including employee travel, cell phones, and office supplies. The spokesperson admitted the memo was true but he denied it was related to canceling the user shows or staff reduction rumors. That’s a mischaracterization of what is going on a Baan right now, he said, Coleman was talking about cutting back on non-head count related expenses, things like travel and so on….reducing those will help Baan to avoid any further staff reductions. But Coleman, in her memo, also said that further staff cuts cannot be ruled out since Baan cannot predict the demand for its applications over the next few quarters. She added that the company will not fill any vacancies except in crucial areas such as sales and services, and may even leave posts empty in research and development. Since October last year, the company has laid off about 1,200 people, or 20 percent of its workforce. BaanWorld ’99 was originally planned for mid-May in Nashville, Tennessee, with a European equivalent in the Netherlands in October. But the spokesperson said Baan plans to reinstate its user conferences as of next year, although the two may be merged into one global show.

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