Layoffs Looming at AvantGo

The handheld software maker, which posted a narrower than expected loss, will cut its staff by 40 percent.

Handheld software maker AvantGo Inc. on Wednesday posted a loss that was narrower than analyst expectations, but, anticipating a slow year, the company announced that it will lay off 40 percent of its staff.

AvantGo, of Hayward, Calif., posted a net loss of $4.3 million, or 12 cents a share, with a revenue of $5.3 million. This compares with a loss of $5.0 million, or 14 cents a share, reported in the first quarter of 2002. Second quarter 2001 resulted in a net loss of $13.9 million, or 43 cents a share, with a revenue of $6.5 million.

Company officials said that AvantGo is planning to lay off 40 percent of its 200 employees in the next quarter.

The company wants to focus its attention on field force applications and vertical business such as pharmaceuticals, officials said, and does not plan to do any major work with the core enterprise software, AvantGo M-Business Server, in the next year.

"Theres not a major release due for some time," said Richard Owen, CEO of AvantGo. "It will be dot releases for the next year."

Owen also said that AvantGo will be deploying "fewer pilots, but pilots that will have more follow-on businesses."

"The cuts impact every part of the company," Owen said. "While we continue to believe that large enterprises will adopt mobile solutions on a larger scale over time, we are planning our business around only modest improvements in the market in the second half of 2002."

AvantGo was among the pioneers of wireless Web browsers for handheld computers and then shifted its focus to the enterprise. Analysts have said companies like AvantGo will need to focus on vertical markets to survive.

"You get the most bang for your buck with a vertical market, said Tole Hart, an analyst at Gartner Inc., in Stamford, Conn., when AvantGo released a software application designed specifically for field inspectors. "E-mail messaging is becoming a commodity now."

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