CA To Cut 1,000 Jobs, Restructure - InformationWeek

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CA To Cut 1,000 Jobs, Restructure

New CEO McCracken puts stamp on software vendor with acquisitions and global shakeup.

Business software maker CA Inc. said it would eliminate 1,000 positions, about 8% of its global workforce, and close some facilities in an effort to sharpen its focus on innovative new IT architectures like cloud computing.

"These actions are intended to better align the company's cost structure with the skills and resources required to more effectively pursue opportunities in the marketplace and execute the company's long-term growth strategy," CA said in a filing with the Securities and Exchange Commission.

CA said the layoffs would occur worldwide. Long Island's Newsday reported the company plans to cut 125 jobs at its Islandia, NY headquarters. CA representatives did not immediately respond to a request for more details.

In its SEC filing, CA said it plans to take a pre-tax charge of $50 million against fourth-quarter earnings-expected May 10-- to cover costs associated with the restructuring. CA also said full-year earnings per share will come in "at the low end" of previously issued guidance of between $1.46 and $1.57.

Despite the moves, CA does not appear to be struggling. The company's net income jumped 24% year-over-year in the most recent quarter, and it increased 8% in the period before that. Sales were up 8% in the last quarter.

Still, CA said it needs to refocus on what it sees are tech's hottest growth markets. The company last month completed its acquisition of cloud platform developer 3Tera for a reported $90 million. Also in March, CA bought out Nimsoft, which offers performance monitoring tools for enterprises and service providers, for $350 million.

All this comes less than three months into the tenure of William McCracken, who was named CEO on January 28 following 36 years at IBM. CA competes heavily with IBM's Tivoli unit, which is also building out cloud-based management services.

At the time of his appointment, McCracken—who replaced John Swainson--said he would focus on building "a clear strategy that will not only unlock the full potential of CA, but will guide our growth today and in the future."

CA shares were off 1.97%, to $22.94, in early afternoon trading Wednesday.

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