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February 7, 1988

TEKNOWLEDGE ENDS DIRECT SALES, CUTS WORKFORCE 30%

By CBR Staff Writer

If the failure of robotics to take hold was the biggest disappointment of the early 1980s, that of the mid-1980s has been the slow progress made by the artificial intelligence community. One of the erstwhile hottest properties in the business, Teknowledge Inc, Palo Alto, California accompanied rotten figures – a second quarter loss of $6.7m after restructuring charges on sales of only $3.8m, down 31% – with news that it was shedding 60 of its 200 employees and closing its direct sales operation. The company puts the need to reorganise down to continued erosion of expert system tool revenue, substantial losses from high levels of product development and marketing expenses and increasing competition and price pressure in the market. In future, Teknowledge will only license to third parties its current product line of the M.1 and S.1 systems and the Copernicus expert system tool still in beta test. Price pressure from low-end systems means that it will have to price Copernicus at only 35% of the planned tag, but version 1.0, for Apollo, Sun and DEC VAX CPUs, will be completed as will the IBM MVS and VM versions. But the company will now emphasise knowledge engineering services and future expert system application products. Nevertheless with $34m in working capital and no debt, Teknowledge says it remains in a healthy financial position.

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