Lower first-quarter revenue and profits, along with a grim outlook for the future, is leading enterprise resource planning vendor Lawson Software Inc. to cut 12% of its workforce, the company said Thursday.

Lawson reported revenue of $87.4 million for the fiscal first quarter of 2003, ended Aug. 31. That's down from $103.9 million in the year-ago quarter. The vendor posted a net loss of $1.9 million, or 2 cents per share, compared with net income of $1.1 million, or 1 cent per share, in the same quarter a year earlier.

While Lawson signed 23 new customers at an average selling price of $333,000 during the quarter, the company says revenue was hurt by several deferred deals and lower overall deal size because companies have been buying individual components, such as human-resources and financial applications, rather than broad application suites. In addition, a decline in European and vertical-market sales hurt the bottom line. License fee revenue was $18.1 million in the first quarter, compared with $35.1 million a year earlier, while revenue from services was $69.3 million in the quarter, compared with $68.8 million.

"While we met our target, with no sign that overall spending will improve, we have a more conservative view of the second quarter," says Jay Coughlan, Lawson's president and CEO. That's why the company will start cutting expenses in areas such as training and R&D, as well as cutting 12% of its workforce, from 1,984 employees to 1,750 employees. Lawson will take a restructuring charge of about $5.5 million in cash for the quarter.