January 18, 2001 -- Though business watchers speak hopefully of a soft landing for the economy, two companies, one a tech provider and the other a consulting firm, announced bad news in the form of reduced earnings forecasts and layoffs.
Even as e-business applications provider Vignette announced good news in the form of continued growth in the number and depth of alliances it has formed with such heavy hitters as Accenture, IBM Global Services and Sun Microsystems, the company also announced facility consolidation and a 15 percent reduction in its workforce due to a 2001 earnings forecast that failed to meet expectations by two cents per share.
Vignette estimates that as a result of these actions it will incur a charge of approximately $45 to $55 million in the first quarter. The company expects to save approximately $100 million over the next four quarters as a result of these actions. Our priorities are simple, Greg Peters, chairman, president and CEO of Vignette said. First, to continue to ensure that we have the most value-added solutions available in the market so we can continue to grow our business and market share; and, second, to do so profitably.
On the consulting front, market intelligence provider Jupiter Media Metrix announced that it expects revenues for the fourth quarter of 2000 to be between $38.2 and $38.5 million, versus previous guidance of between $39.5 and $42.0 million. Projected net loss applicable to common stockholders, excluding amortization, is expected to be between $0.22 and $0.23 per share, versus previous guidance of a loss of $0.01 per share. The company will release final audited fourth quarter and year-ended Dec. 31, 2000 results on Thursday, Feb. 8, 2001, after market close.
The rapidly softening economy directly impacted our revenues, and left us with expenses that were based on previously planned, higher growth rates. Moreover, unanticipated costs in our international expansion initiatives, and several one-time costs related to our recent merger, resulted in higher overall costs, said Tod Johnson, chairman and CEO of Jupiter Media Metrix. Recognizing the changing market conditions, we are taking the necessary steps to address these challenges and adjust our cost structure accordingly. These steps include continued leverage of merger-related efficiencies and general expense management programs that support a more conservative growth rate, both of which will be supported by a staff reduction of 8 percent, or 80 employees.