i2 Cutting 500 More Jobs

Supply chain management software maker looks to cut $25 million per quarter in operating costs.

Supply chain management software maker i2 Technologies is cutting 15 percent of its staff, a company spokeswoman confirmed today.

The layoffs, which will be spelled out in a 10Q filing with the Securities and Exchange Commission, will include about 500 employees, leaving the Dallas-based company with fewer than 2,900 employees. The job cuts are expected to be completed in the first quarter of 2003.

The spokeswoman said the goal of the job cuts was to reduce the companys spending to $100 million per quarter by the end of next quarter. It is currently spending about $125 million per quarter.

After its second quarter earnings results in July, i2 implemented a major restructuring that included a 30 percent reduction of its 4,800 employees. Those job cuts have been completed. As of Oct. 1, i2s headcount stood at 3,355 employees.

As part of the restructuring began in July, product development and sales efforts were focused on the companys major solution suites – supply chain management, supplier relationship management and demand planning. i2 made plans to streamline its product offering by removing product overlaps and providing some minor software products as tool kits and eliminating others. Likewise, the company said it would reduce the amount of hardware and middleware stacks it currently supports, thereby reducing development and support costs.

At the same time, i2 officials are continuing to move U.S. engineering to the companys development center in India.

After the second quarter restructuring, additional troubles followed. During its third quarter earnings call in October, i2 officials hinted at some difficulties with an implementation at Home Depot and worked to dispel rumors that it was dropping its spend optimization product line.

"There have been all kinds of rumors floating around. These are dead wrong," said Sanjiv Sidhu, founder and CEO of i2. "We are very focused on spend optimization because our customers are."

i2, however, is not alone in its restructuring plans. Manugistics Group Inc., which competes with i2 in the supply chain automation software market, announced plans in late September to reduce expenses by cutting its work force by 10 percent to 12 percent.