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BMC to cut 12 percent of staff

BMC to cut 12 percent of staff

BMC will lay off around 12 percent of its staff, as sales and earnings in its recently-concluded fourth quarter are expected to disappoint.

BMC Software Inc. will lay off between 825 and 875 employees, or around 12 percent of its global workforce, as part of a plan to reduce costs and improve its bottom line, the Houston maker of systems management software announced Monday.

The layoffs will result in a pre-tax charge of between US$50 million and $60 million, most of which BMC will take in fiscal 2006's first quarter, which ends in June, and the rest in the second and third quarters. BMC expects the workforce reduction to generate annual expense savings of about $100 million. Affected employees will begin to be notified this week, a spokesman said.

Based on preliminary estimates for its 2005 fourth quarter, ended March 31, revenue and earnings will fall below expectations the company provided in February, the company said.

Revenue is now expected to be in the $388 million to $400 million range, down from the previous forecast of between $410 million and $425 million. Meanwhile, pro forma earnings per share excluding certain special items, will be in the $0.08 to $0.12 range, down from a range of between $0.17 to $0.22. Actual earnings per share are expected to be between a loss of $0.01 and a profit of $0.03.

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