Corel Corp, the Canadian software house is to shut down its business software engineering facility in Orem, Utah, with the loss of 530 jobs – nearly two-thirds of the company’s total software development headcount of 900. Yesterday, Corel reported a second- quarter net loss of $8.3m on revenue of $63m, down from a loss last time of $21.1m on revenue of $45.5m. Chief executive Michael Cowpland claimed the results weren’t as bad as analysts had predicted. He promised a return to profitability by the end of the fiscal year. Corel’s unlucky Utah plant is the same that housed WordPerfect Corp before it was bought out by Novell Inc, which stripped 420 jobs from the place before selling it on to Corel in January 1996. The Orem closure will cost 530 jobs, with most functions to be moved to Corel headquarters in Ottawa, and a few, such as localization, moved to smaller offices in New Hampshire and Dublin, Ireland. The news isn’t all terrible. 150 engineering and quality assurance jobs will be created in Ottawa. Even so, the company says that while its Utah engineers are welcome to apply for the new positions, most will be let go. Cowpland says he regrets the disruption to the Orem workers. Corel’s debts have their origin in its acquisition of WordPerfect from Novell, but analysts attribute the operating losses it has sustained over the last eighteen months to a failure on the part of management to cut costs. In particular staff costs remained flat or increased, even as sales declined. In January, Computerwire predicted that Corel would be forced to resort to widespread layoffs before returning to profitability (CI No 3,330). Now, more than a third of the company’s 1500 employees are gone.
