The ax duly fell at Borland International Inc as 300 people, 30% of the workforce lost their jobs. For the first time in years some of these include Borland’s beloved development people. Del Yocam, CEO of the Scotts Valley, California-based developer tools company warned in January that the company’s cost structure needed to be dramatically […]
The ax duly fell at Borland International Inc as 300 people, 30% of the workforce lost their jobs. For the first time in years some of these include Borland’s beloved development people. Del Yocam, CEO of the Scotts Valley, California-based developer tools company warned in January that the company’s cost structure needed to be dramatically adjusted and that cost cutting program were being readied (CI No 3,085). Borland looks to have bitten off far more than it could chew with its acquisition last May of Boston, Massachusetts-based Open Environment Corp (OEC). As soon as its share price got to a usable level it lashed out and acquired OEC for its Entera intelligent middleware, costing $65m in stock (CI No 2,912). Borland is giving up the lease on OEC’s Boston office and is relocating as many of the key developers that it can persuade to move to Scotts Valley. It will leave a skeletal OEC staff in a few Satellite offices on the Boston area, but eliminate many of the usual duplications that occur in such a merger. A big chunk of the $30m annual operating cost savings the company says it will gain from the move come from OEC. It also expects $30m in product restructuring savings, but Yocam wouldn’t be drawn on whether any products would be merged or dropped. At yesterday’s price, Borland has a market capitalization of just over $200m, no doubt pleasing possible suitors, if there are any still out there. Oracle is the obvious candidate, though the company would appear to have got what it wanted from Borland already, when it signed a deal to integrate Borland’s C++ and Java tools into Oracle’s Sedona and Designer/Developer 2000 offerings. with C++ and JBuilder. The latter’s shipment date has slipped from this quarter to the third recently. Yocam was on the board at Oracle before he came to Scott’s Valley, so maybe Oracle’s Larry Ellison will take pity and bail the company out in a few months if, as is quite possible this ax-wielding doesn’t prove enough to save Borland, although Yocam said yesterday that this was an action we hope not to have to take again. The layoffs and other restructuring will involve a charge this, the fourth quarter of between $24m and $30m. Borland’s headcount now stands at 700. The Street saw reasons to push the shares up – for whatever reason. They closed up $0.875at $7 exactly.