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Manugistics To Shrink Workforce After Losses Grow

Supply-chain software vendor will cut staff by as much as 12% to try to return to profitability.

Losses at Manugistics Group Inc. widened during its second quarter, and the supply-chain software and services vendor says it will cut its workforce 10% to 12% as it tries to return to profitability. For the quarter ended Aug. 30, Manugistics reported a net loss of $47.7 million, or 68 cents per share, on sales of $69.9 million, compared with a net loss of $21.7 million, or 32 cents per share, on sales of $73.8 million in the same period a year ago.

"Our No. 1 goal now is accelerating our return to profitability," CEO Greg Owens says. The company, which bills itself as an "enterprise profit optimization" application vendor, will reduce its head count to between 1,225 and 1,250 by the end of the current quarter. The job cuts, combined with other expense reductions, will save the company $5 million to $7 million per quarter.

The cuts are in addition to a 12% workforce reduction Manugistics revealed in June. The company also says president Richard Bergmann, who took a leave of absence in late June, will leave to "pursue other business opportunities." No replacement was announced.

There are signs that business is beginning to pick up, Owens says, citing more requests for proposals from prospective customers and an increase in the sales pipeline. But those aren't enough to quickly return Manugistics to profitability. "In this environment," he says, "we must manage expenses as tightly as we manage revenue generation."

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