JDA Software Group, a Scottsdale-based company that makes software for retailers and their suppliers, said Thursday it has laid off about 100 new-product development employees as a result of its July 2006 acquisition of Manugistics, another software developer.
The local company said the employees are no longer needed because the company will adopt a software platform used by Manugistics for building most of its new products and no longer plans to use a different platform previously under development by JDA.
The Manugistics platform is widely used in the industry and makes more sense to use as the foundation for new products rather than trying to adapt Manugistics products to the new JDA platform, said company spokeswoman Maureen Tuskai.
JDA expects to save more than $15 million annually by adopting the Manugistics platform, which is being branded JDA Enterprise Architecture.
“The decision to reduce our work force was a very difficult one to make,” chief executive Hamish Brewer said. “However, the advantages of standardizing on one platform made this decision compelling.”
As a result of the layoff, JDA will be able to reduce research and development spending “so that it is more in line with industry norms,” Brewer said.
Affected employees, who are mostly located at the company’s Scottsdale headquarters, will be offered severance packages, outplacement services and other assistance, the company said.
The reduction leaves JDA with about 1,600 employees worldwide, including about 440 in new-product development, the company said.
Also on Thursday the company said it expects to report revenue of about $89 million in the fourth quarter of 2006, down from $89.2 million the previous quarter. The revenue prediction was less than the $93.4 million consensus of Wall Street analysts.
Actual fourth quarter results will be announced Jan. 29.
Chief financial officer Kristen Magnuson attributed the results to lower-than-expected software licensing in the Asia-Pacific region and a larger-than-expected decline in consulting service revenue. Also the company experienced a one-time $1.8 million expense related to the Manugistics acquisition.
“Although we experienced a number of earnings setbacks in the quarter, many of which were related to the integration of Manugistics, I do not anticipate ongoing recurrence of these detrimental impacts,” Brewer said.
JDA shares dropped 27 cents, or 1.83 percent, to $14.47 in after-hours trading on the Nasdaq stock market.
A laid off employee, who asked to remain anonymous, said rumors of the job cuts had been circulating for several months, creating morale problems for the staff. But he said company officials treated him fairly when they made the announcement Thursday.
“They gave the people two weeks pay for every year served as severance, which worked out for me,” he said. “But I feel sorry for those who worked there for less than a year.”