Baltimore to ax 14% of staff in Asia
The decision to cut jobs in the region follows its parent company's announcement today that it would reduce its 1,000-strong workforce by 220 in the coming months. By the second quarter of next year, however, Baltimore plans to reduce its staff strength to just 470.
The move is part of a restructuring and cost reduction program that's expected to save the company US$101 million and help it reach profitability by the second quarter of 2002.
Baltimore Asia Pacific managing director John Palfreyman said that all 21 job cuts will take place at its Sydney-based research and development (R&D) division, as the company centralizes its R&D functions in Dublin, Ireland.
Without revealing specifics, he said the retrenchment exercise in Sydney will be completed in the "coming months".
Baltimore currently employs 152 staff at its Hong Kong, Singapore, Sydney, Melbourne and Canberra offices, said Palfreyman.
The latest round of job cuts comes on top of the 250 layoffs announced in May. Then, Palfreyman said that Asia Pacific (excluding Japan) was unaffected by the job cuts.
He pointed out today that Baltimore was not closing any offices in the region and that it has 15 new professional services positions (in consultancy and system integration) to be filled by mid-September this year to "cope with the growing demand of clients in the region". He did not elaborate.
According to Palfreyman, Baltimore's customer base in Asia Pacific of about 920 at the start of the year has increased to about 972 to date.
Some of its clients in Asia Pacific include ID.Safe, TradeLink, ANZ Bank, Telstra, Australian e-Defence, Morgan & Banks and Arthur Anderson. "We continue to see growing demand for our products," he claimed. Its products include SelectAccess, an access and authorization management solution, and MIMEsweeper, a software which detects viruses in email.
Palfreyman said Baltimore Asia Pacific (including Japan) contributed about 28 percent to second-quarter global revenues ended June 2001, compared with about 34 percent for the same period last year. He said Baltimore reported unaudited revenues of US$23.2 million for the second quarter this year, an increase of 2 percent over the same quarter last year, and a drop of 28 percent over the first quarter this year.
Cutting cost
Meanwhile, when asked how the restructuring and cost reduction program would impact Asia Pacific, Palfreyman said: "It's business as usual. The restructuring will not adversely affect the level of support we've always offered our customers and partners."
However, he noted that the company would bring some of its marketing functions in the region, such as public relations, in-house. "The challenge is to balance expansion of staff against committed revenues so as to achieve profitability for the region," he said.
Baltimore said in the statement that its other restructuring measures include combining its authorization and public key infrastructure-based authentication technology into one business unit, and running its content security business as a separate unit.
It also plans a voluntary delisting from Nasdaq from September 30 this year.
In the US, Baltimore's shares last traded unchanged at US$0.67.