Cognos cuts workforce 10 per cent

Due to a lacklustre financial performance over the last three quarters, Canadian business intelligence provider Cognos Wednesday said it has laid off 10 per cent of its global workforce.

The axe fell on 144 Cognos employees in Canada, 135 of which worked in the company’s head office in Ottawa, bringing it down to 1,214 personnel. No office locations in Canada will be shut down as a result of the downsizing, though that will not be the case in other countries. According to Rob Ashe, senior vice-president and chief corporate officer, some offices in “remote locations” will close, though he refused to name them since the closures are not yet complete.

Cognos also said it expects to fall short of financial expectations for its first quarter, 2002, (ending Thurs. May 31), it anticipates it will post a net result anywhere from break-even to a loss of US$4 million. This is in contrast to a net profit of US$12 million for the same period last year.

“This reduction is not so much a short term thing because of the quarter, it’s based on the results of the last two quarters as well,” said Ashe. Net income for the fourth quarter 2001 was US$22.1 million; the third quarter weighed in with a net profit of US$17 million.

Ashe said the company attributes the financial performance to a weakened economy. “In our fourth quarter, ended Feb. 28, it really impacted us across our very large deals, deals greater than US$500,000,” he said. “In this most recent quarter, the impact has been more broad-based.” The markets have been toughest in North America, he said, particularly in the U.S.

On top of staff reductions, cuts have been made in other areas of Cognos to stem the financial bleed. “We have been reducing our discretionary spending as much as we can: marketing programs, travel . . . entertainment,” said Ashe.

Cognos intends to make this a one-time round of cuts. ” We sure hope this is it; that’s our plan,” said Ashe, “(but) nothing’s out of the question.” Outgoing employees will receive severance packages, as well as “outplacement counselling” designed to help them relocate to other jobs.

The cuts will not derail or delay the company’s product efforts, he added. New products should hit the market this fall.

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Jim Love, Chief Content Officer, IT World Canada

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