Manugistics restructuring and laying off 80 workers Md. work force of 514 is being pared by about 50 people


September 25, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

In an effort to pull itself out of a financial slump, Manugistics Group Inc. said yesterday that it is restructuring its operations and laying off 80 workers.

The Rockville company, which sells software that helps companies manage their inventories, said the moves will allow the firm to focus on key customers and cut costs.

The company has 1,451 employees worldwide, 514 in Maryland. Company spokeswoman Charlotte Penner said about 50 of the layoffs will occur in Maryland.

"We need to adjust our expenses to be in line with our revenue stream," Penner said. "This is part of a program of containing our costs."

In addition, Manugistics is creating a unit to serve customers in its core high-technology and electronics markets.

"We're just continuing to evolve our strategy of focusing on these industries," said Penner. She said the restructuring plan went into effect immediately.

Manugistics is trying to reverse a decline after two disappointing quarters. In its fiscal fourth quarter, which ended Feb. 28, the company enjoyed a profit of $6.69 million and nearly a doubling of revenue.

Those numbers caused Manugistics' stock to soar, hitting an all-time high closing price of $64.75 on April 14.

However, the company posted net losses in the two following quarters.

XTC Manugistics' management conceded that the firm had been bogged down by its acquisitions of other companies and the reorganization of its sales force.

Manugistics' problems have been reflected on the stock ticker. The release of a disappointing earnings forecast May 21 sent Manugistics shares into a two-day tailspin that cost the company 48 percent of its stock value.

Yesterday, Manugistics shares fell $1.25 to $9.875, or 85 percent below the April 14 closing price.

Eric B. Upin, an analyst with BancBoston Robertson Stephens in San Francisco, said that, while Manugistics is in a hot industry and has a distinguished client roster, it may be in for more belt-tightening.

"We're seeing the company retreat," he said. "We may be at the beginning of a contraction here, which is unfortunate because this is a very, very solid company."

W. Christopher Mortenson of BT Alex. Brown Inc. in New York said Manugistics is right to focus on specific industries. "The company has had two very disappointing quarters in a row, so clearly there was a need to do things differently," he said.

Pub Date: 9/25/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.