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CA to Lop Off 1,000 Jobs

Software developer CA will eliminate 1,000 jobs, shutter some of its facilities and deliver full-year earnings at the bottom of its previous guidance, according to its latest filingwith the Securities and Exchange Commission. CA (NASDAQ: CA), which recently named William McCracken to replace John Swainson as its CEO, posted solid sales and earnings in its […]

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Larry Barrett

Apr 6, 2010

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Software developer CA will eliminate 1,000 jobs, shutter some of its facilities and deliver full-year earnings at the bottom of its previous guidance, according to its latest filingwith the Securities and Exchange Commission.

CA (NASDAQ: CA), which recently named William McCracken to replace John Swainson as its CEO, posted solid sales and earnings in its most recent quarter and reiterated its profit estimatesfor the fiscal year.

Apparently things have changed and changed quickly.

The restructuring move, which calls for the reduction of about 8 percent of its workforce and “additional global facilities consolidations,” will result in a $50 million pre-tax charge, with roughly $47 million allocated for severance payments.

The company expects to complete the restructuring by the second quarter of fiscal 2011.

CA shares fell $0.75 a share, or 3 percent, to $23.10 in Tuesday afternoon trading.

In an e-mail to employees, McCracken said the workforce reductions are part of an effort to become “leaner, more competitive and more effective in our execution.”

“As difficult as they are, these actions are necessary to focus our skills and investments on those activities that support our corporate strategy and have the greatest impact on our performance, growth and customer loyalty,” McCracken said in the e-mail.

In its third quarter, CA posted a profit of $233 million, or $0.43 a share, on sales of $1.13 billion, slightly above analysts’ estimates. At the time, there’s wasn’t so much as a hint of any cost-cutting moves ahead and the company confirmed its previous guidance of non-GAAP earnings between $1.60 and $1.71 a share for the year.

Now, according to the 8-K filing, CA is projecting earnings closer to the low end of this guidance and will likely fall short of the current consensus estimate of $1.69 a share for the fiscal year.

In the past year, the Islandia, N.Y.-based company has made a number of significant cloud-computing acquisitions, most notably picking up enterprise cloud management software developer Nimsoftfor $350 million earlier this month.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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Larry Barrett

Larry Barrett is a freelance journalist and blogger who has covered the information technology and business sectors for more than 15 years. Most recently, he served as the online news editor for 1105 Media's Office Technology Group and as the online managing editor for SourceMedia's Investment Advisory Group publications Financial Planning, On Wall Street, and Bank Investment Consultant. He was also a senior writer and editor at Ziff Davis Media's Baseline Magazine, winner of the Jesse H. Neal National Business Journalism Award, and ZDNet. In addition, he's served as a senior writer and editor at prominent technology and business websites including CNET, InternetNews.com, Multichannel News, and the San Jose Business Journal.

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