NetIQ to Lay Off 150 -- Redmondmag.com

NetIQ to Lay Off 150

By Scott Bekker
07/22/2005

Systems and security management software company NetIQ Corp. will lay off 150 people, or about 15 percent of its workforce over the next 12 months and will outsource some development to India as the company realigns to regain profitability.

"Following the March quarter, we announced that we were in the process of realigning our business to better execute our Knowledge-Based Service Assurance Strategy. Today, we announced key components of our fiscal 2006 plan to facilitate that realignment, including a series of actions that will reallocate our corporate resources to our strategic products and enable us to run the company more efficiently," NetIQ chairman and CEO Chuck Boesenberg said in a statement Friday.

The news comes in advance of NetIQ's financial filings for the fourth quarter, which ended June 30 and which the company will discuss Aug. 3. Boesenberg on Friday said NetIQ will beat the fourth quarter guidance the company provided in May when reporting its third quarter results. At the time, NetIQ anticipated revenues from continuing operations for the quarter ending June 30 to be in the range of $47 million to $51 million, a drop from the revenue in the year-ago quarter when NetIQ posted $56.7 million in revenues.

Those figures exclude revenue from the WebTrends unit, which NetIQ sold in April. NetIQ expects to recognize a pre-tax gain of nearly $65 million from the WebTrends sale, which will push the company's numbers up.

In addition to the expected drop in year-over-year revenue for continuing operations in the fourth quarter, the company's third quarter numbers showed a net loss of $3.2 million for continuing operations. Revenue from continuing operations in the third quarter fell to $51.1 million this year from $55.4 million in the year-ago quarter.

As of late March, NetIQ had 1,042 employees at its San Jose, Calif., headquarters, its Houston facility and elsewhere. NetIQ's statement said that the majority of development positions will remain in North America, but that the company has contracted for Bangalore, India-based engineering services from Symphony Service Corp.

NetIQ is a major player in the Windows third-party security and management tools market and sold Microsoft the product that became Microsoft Operations Manager.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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