PeopleSoft Inc is to cut 6% of its workforce, around 430 jobs, and redeploy 100 others to new areas as it continues to face stiff competition in the enterprise resource planning market. Yesterday, after the market closed, the company posted net income of $40m, or 16 cents a share, compared with $39.5m in the same period last year. The figures exclude a $13.9m charge relating to its acquisition of Intrepid Systems Inc. Revenues were up 40% to $364.2m, from $260.6m last quarter. For the year, income was $157.1m (excluding the charge) and revenues were $1.31bn, compared with last year’s $815m. The results were one cent a share below analysts expectations, and given the recent slump in Peoplesoft’s share price, it looks certain that shares will drop further today. Analysts pointed to weak revenues from core license fees for the fourth quarter, which were up only 3% compared to the same period last year, although the $576.5m in licensing revenues for the whole year were up 33% from the previous year. Forecasts had suggested growth of around 12% during the quarter. In the first quarter of next year, the company said it would post a charge of $175m related to the formation of Momentum Business Applications Inc, the R&D shell company it formed last November (CI No 3,540). Peoplesoft was aggressive in the face of the expected onslaught on its share price. It said it would invest heavily in electronic business and industry specific application development, and said it was likely to hire more people than it was firing over the next few months. It claimed its profit margins were among the highest in the industry and that it had $400m of cash in hand. CEO Dave Duffield told investors that Peoplesoft had gained market share from its largest competitor [unnamed, but obviously SAP AG] and would gain more in 1999.
