Troubled software maintenance outsourcing firm Peritus Software Services Inc appears to be closer to the end of its life, announcing Monday that its president and chief executive officer Dominic Chan has resigned effective immediately. The Billerica, Massachusetts-based company, which last week warned of another quarterly loss and said it would be cutting staff, said that Chan intends to consider making an offer to purchase certain assets of the company. For now, chief financial officer John Giordano will take over as president and CEO.
Peritus will be reducing its workforce by about 40 people, or about one-third of the total. The staff cuts will come in the areas of sales, marketing, and Year 2000 services and will not effect the core outsourcing delivery functions. The downsizing will leave the company with just about what it needs to meet its current support obligations and will result in a restructuring charge of roughly $250,000.
Peritus is expecting to post a loss for the quarter ending March 31 of between $2m and $2.5m, a shortfall which it blames on a significant license transaction that it was expecting to close in the quarter but which has been delayed indefinitely. Since its ability to continue operations was more or less dependent upon achieving break-even cash flow or obtaining additional financing, the company is now looking to sell parts of the business or its technology and claims to be in talks with investment banks about such a deal. Although there are some interested parties, including Chan, there are no firm offers yet, a company spokesperson said.
