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July 14, 1998

METACREATIONS TO CUT 75 JOBS AS BAD Q2 LOOMS

By CBR Staff Writer

MetaCreations Corp says it plans to cut 75 of its 300 employees as a result of an anticipated shortfall in revenues for its second quarter, and subsequent re-structuring. Job losses will come mostly from sales and marketing and administration divisions. Carpinteria, California-based MetaCreations, which reports on its June quarter next Monday, is the 3D visualization software company that resulted from the merger in May 1997 of MetaTools Inc and Fractal Design Corp (CI No 3,172). Metacreations announced at the end of June that its second quarter would come in significantly lower than expectations, due to a drop in domestic retail sales, weak demand in Japan and increased reserves for returns to reduce distributor inventory levels. Second quarter revenues are expected to be in the range of $8m to $9m, with a net loss for the quarter of between $10m and $11m expected, or 44 cents to 48 cents per share. Fred Brown, senior vice president of sales and marketing, is one of those to go. Metacreations replaced its founding CEO, John Wilczak, with ex Silicon Graphics World Trade Group president Gary Lauer in February. The company’s only good news recently has been of support for its Metastream 3D file format from both Intel Corp – a development partner – and Microsoft Corp, which plans to integrate Metastream within DirectX. The company’s products encompass consumer and professional photography and video, digital imaging, animation, computer graphics, three-dimensional and data visualization.

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